The Genoa conference:

LIBRARY

UNIVERSITY OF CALIFORNIA
RIVERSIDE

The Genoa Conference

The Rijfht Hon. David IJovd George, M. P., Prime Minister of Great Britain.

The Genoa Conference :

I

By J'* Saxon Mills, M.A., St. Johns College.

Cambridge, and of the Inner Temple. Barrister-at-Law ; Author
of " The Life of Sir Edward Cook," " The Panama Canal,"
" The Future of the Empire," &c.

WITH 19 ILLUSTRATIONS

LONDON: HUTCHINSON & CO.
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PREFACE

I GLADLY write a preface to this book on the Genoa Conference,
even although it deals much too generously with my own
part in that historic gathering. Mr. Saxon Mills is an en-
thusiast for the cause which inspired every word spoken
and every decision made by the British Empire Delegation at
Genoa — the cause of peace and international goodwill. For
that cause we strove whole-heartedly from beginning to end.
We have nothing to apologize for and nothing to conceal.
Every kind of comment that throws light upon the Conference
or spreads the knowledge of its work is welcome to us. Mr.
Saxon Mills has put the records together with a vivid descrip-
tion of their setting amongst the old palaces of the merchant
princes of Genoa, and a lucid account of the drama which
they staged — a drama of most human character, with nations
as the actors and the whole world as audience. I hope his
story will be widely read.

Like the great dramas of old, Genoa showed the conflict
between two great forces, two currents of feeling, two states
of mind — I may almost say, two worlds, the old and the new.
The old world is that of national blindness, national jealousy,
national fear, national suspicion, national prejudice. The
Allies went into the Great War for a great common ideal ;
but in the fierce suffering of the ordeal and in the passionate
triumph of victory the old Adam has gradually reasserted
himself — a shell-shocked, shaking, nerve-ridden Adam, almost
as much afraid of his friends as of his foes. All the world now
knows his state of mind — his belief that his own safety depends
upon the suppression of others, his conviction that he can
build up his own welfare without regard for and even by
antagonism to the welfare of his neighbours, his instinctive
recourse in all problems to the code of force. Some think

PREFACE

him right, some think him wrong; but multitudes amongst
the makers of opinion in Europe, whether in chanceries or in
popular assemblies, or in literature and the Press, whether
they wish him otherwise or not, regard him as incurable.

That is the old world — a world which has tortured itself,
exhausted itself, shattered itself, almost to final ruin and
collapse.

The new world has a different faith and a different point
of view. It believes in nationalism no less firmly than the
old, for nationalism is the individual force, the genius, the
salt in every varied impulse which makes up Western Civiliza-
tion as a whole. But it also believes with its whole heart
that in the welter of passion, and in the economic chaos to
which the world has been reduced by war, the welfare of
every nation depends upon peace, co-operation, a helping
hand from the strong to the weak, a regard for the welfare
of all.

The British Empire Delegation stood for that faith at
Genoa, and had behind it, as I believe, the goodwill and the
deep desire of a majority of all true democracies throughout
the world. The campaign for peace is only beginning. We
have won positions from which we must press forward again.
We are bivouacked on the field. We must not rest till we
have won.

(Signed) D. LLOYD GEORGE.

CONTENTS

CHAP. PAGH

I. — ORIGINS 9

II.— THE SCENE 33

III. — THE INAUGURATION 45

IV. — THE ORGANIZATION 72

V. — GETTING UNDER WEIGH 82

VI. — STORMY WEATHER 88

VII. — LE SAVONNAGE DE LA TEMPETE .... 101
VIII. — BRITISH AND FRENCH POLICY . . . .no

IX. — CYCLONE AND ANTI-CYCLONE 133

X. — THE PALAZZO DI SAN GIORGIO AGAIN . . . 142

XL — THE RUSSIAN QUESTION 180

XII. — THE MEMORANDUM 188

XIII. —THE REPLY 208

XIV. — THE ECONOMIC COMMISSION REPORTS . . . 228

XV.— THE FINAL " PLENARY " 233

XVI.— THE HARVEST 289

APPENDIX I. 315

APPENDIX II 321

APPENDIX III 333

APPENDIX IV 358

APPENDIX V. 360

APPENDIX VI 373

APPENDIX VII 398

APPENDIX VIII 401

APPENDIX IX. ....... 416

LIST OF ILLUSTRATIONS

The Right Hon. David Lloyd George, M.P., Prime

Minister of Great Britain .... Frontispiece
Villa de Albertis, Quarto dei Mille, Residence of

Mr. Lloyd George at the Conference . . Facing page 32
Casa della Stampa. Conference Press Centre at

Genoa .......,, 36

Sir Edward Grigg, K.C.V.O., C.M.G., Private

Secretary to Mr. Lloyd George ,, 38

Palazzo Municipale, Via Garibaldi ... ,, 42

Palazzo di San Giorgio. The Hall where the

Plenary Sessions were held .... ,, 46

Signor Facta, Prime Minister of Italy and

President of the Conference ... ,, 50

Group at Genoa „ 50

The Right Hon. Sir Robert Home, G.B.E., K.C.,

M.P., Chancellor of the Exchequer . . ,, 56

The Right Hon. Sir Laming Worthington-Evans,

Bt, M.P., Secretary of State for War . 64

The French Delegates at Genoa ... ,, 80

Russian Delegation ...... ,, 80

Dr. Rathenau, late German Minister for Foreign

Affairs „ 102

M. Tchitcherin, Chief Bolshevist Delegate, at

the Reception at the Palazzo Ducale . . ,, 128

Palazzo Reale, Via Balbi. Headquarters of the

Conference ...... „ 128

Signor Schanzer, Italian Foreign Minister . . ,, 256

Dr. Wirth, German Chancellor. Chief German

Delegate ....... ,, 272

Dr. Benes, Foreign Minister Czecho-Slovakia.

Chief Czecho-Slovakian Delegate . . . „ 304

Viscount Ishii, Japanese Ambassador in Paris.

Japanese Delegate to Conference . . . ,, 320

Securus judicat orbis terrarum."

— St. Augustine.

" Siate apostoli di fratellanza delle Nazioni e delta
uuita, oggi ammessa in principio, ma nel fatto negata,
del genere uniano. Vogliamo la Santa alleanza dei
Popoli."

— Mazzini.

THE GENOA CONFERENCE

CHAPTER I

ORIGINS

FOR any historic analogy to the meeting of the nations
at Genoa we might have to go back to the early
(Ecumenical Councils of the Christian Church, beginning
with that of Nicaea. The accounts of that first great General
Council in the Bithynian city (A.D. 325) are, indeed, quite
interesting to one who was present at Genoa. We find the
same plenary sessions in the palace, the separate meetings of
committees and the various groups, the immediate translation
of the speeches, in that case from Latin to Greek, and many
other amusing resemblances.

The Genoa Conference had its origin in the sessions of the
Supreme Council at Cannes in January, 1922. This Council
had met several times since the end of the war, and had
arrived at decisions, often based on compromise, in order
to meet the problem of the hour. Mr. Lloyd George was
determined that these meetings in January, which followed
close upon the resounding success at Washington, should
produce something of pith and moment. Europe, and the
world in general, were at this time suffering from the worst
effects of a war which, judged quite objectively, can only be
described as the most colossal blunder ever committed by the

10 The Genoa Conference

inhabitants of this planet. A world which down to 1914
had been prosperous and progressive was broken and im-
poverished almost beyond recovery. It is desirable for a
historian, as well as for a biographer, to allow the actors in
his story to speak, as far as possible, for themselves, and
I shall pursue this method in my record of the historic meetings
in the old Ligurian city. Mr. Lloyd George, in his speech on
the vote of confidence with regard to Genoa in the House
of Commons, April 3rd, 1922, painted the world-scene in
colours not too gloomy for the truth. He said :

" The Conference has been called to consider the problem
of the reconstruction of economic Europe, devastated and
broken into fragments by the desolating agency of war.
Europe, the richest of all continents, the continent which
possesses the largest amount of accumulated wealth and
certainly the greatest machinery for the production of
wealth, the largest aggregate of human beings with highly
civilized needs and with highly civilized means of supplying
those needs, and therefore Europe, the best customer in
the world and of the world, has been impoverished by the
greatest destruction of capital that the world has ever
witnessed. If European countries had gathered together
their mobile wealth accumulated by centuries of industry
and thrift on to one pyramid and then set fire to it, the
result could hardly have been more complete. International
trade has been disorganized through and through. The
recognized medium of commerce, exchange based upon
currency, has become almost worthless and unworkable ;
vast areas, upon which Europe has hitherto depended for
a large proportion of its food supplies and its raw material,
completely destroyed for all purposes of commerce ;
nations, instead of co-operating to restore, broken up by
suspicions and creating difficulties and new artificial restric-
tions ; great armies ready to march, and nations already
overburdened with taxation having to bear the additional
taxation which the maintenance of these huge armaments
to avoid suspected dangers renders necessary."

Origins 11

We need not dwell on the various aspects of these dis-
tressing conditions — the chaotic exchanges, the almost
universal and progressive inflation of currencies, the failure
in the public finances of almost all countries to make both
ends meet. The machinery of commerce, on whose sweet
and steady working England depends more than any country
in the world, seemed hopelessly shattered. We are reminded
of Kipling's famous story in which a shell, fired from a revenue
cruiser, penetrated the privateer's engine-room and exploded
with results to the machinery which were slightly and tem-
porarily repaired only after months of agonizing labour.
Such was the condition of the European commercial system
three years after the war. At the beginning of 1922 England's
international trade was about fifty per cent, of its pre-war
figure. Two millions of her artisans were workless and wage-
less, and dependent on a vast and ruinous provision of outdoor
relief. Russia lay in the last agonies of famine and social
dissolution. Germany, where a fevered and unnatural indus-
trial activity, the product of abnormal world-conditions,
prevailed, was drifting rapidly to the brink of the cataract.
It is not surprising that Mr. Lloyd George should have formed
the idea of a general, or at least a European, conference, at
which the best intelligence of the nations affected should be
concentrated on these problems, and, if possible, arrive at
an agreed and effectual policy.

We will simply " regard and pass " those attributions of a
lower and more selfish political motive to a man whose tem-
perament and religious and political tradition made this
humanitarian task especially congenial.

With this object, then, the British Prime Minister moved,
on the morning of January 6th, 1922, in the Supreme Council,
a draft resolution, which was finally approved at a further
meeting on the afternoon of the same day. This famous
resolution, which was the basis of the Genoa Conference
and figured prominently and continuously in its proceedings,
ran thus :

" The Allied Powers in conference are unanimously of

12 The Genoa Conference

opinion that an Economic and Financial Conference should
be summoned in February or early March, to which all the
Powers of Europe, including Germany, Russia, Austria,
Hungary and Bulgaria, should be invited to send representa-
tives. They regard such a Conference as an urgent and
essential step towards the economic reconstruction of
Central and Eastern Europe, and they are strongly of
opinion that the Prime Ministers of every nation should,
if possible, attend it in person in order that action may
be taken as promptly as possible upon its recommendations.

" The Allied Powers consider that the resumption of
international trade throughout Europe and the develop-
ment of the resources of all countries are necessary to
increase the volume of productive employment and to
relieve the widespread suffering of the European peoples.
A united effort by the stronger Powers is necessary to
remedy the paralysis of the European system. This effort
must include the removal of all obstacles in the way of
trade, the provision of substantial credits for the weaker
countries and the co-operation of all nations in the restora-
tion of normal prosperity.

" The Allied Powers consider that the fundamental con-
ditions upon which alone this effort can be made with hope
of success may be broadly stated as follows :

1. Nations can claim no right to dictate to each other
regarding the principles on which they are to regulate
their system of ownership, internal economy and govern-
ment. It is for every nation to choose for itself the
system which it prefers in this respect.

2. Before, however, foreign capital can be made
available to assist a country, foreign investors must be
assured that their property and their rights will be
respected and the fruits of their enterprise secured to
them.

3. The sense of security cannot be re-established unless
the Governments of countries desiring foreign credit
freely undertake —

Origins id

(a) That they will recognize all public debts and
obligations which have been or may be undertaken or
guaranteed by the State, by municipalities, or by other
public bodies, as well as the obligation to restore or
compensate all foreign interests for loss or damage
caused to them where property has been confiscated or
withheld.

(b) That they will establish a legal and juridical
system which sanctions and enforces commercial and
other contracts with impartiality.

4. An adequate means of exchange must be available,
and, generally, there must be financial and currency con-
ditions which afford sufficient security for trade.

5. All nations should undertake to refrain from pro-
paganda subversive of order and the established political
system in other countries than their own.

6. All countries should join in an undertaking to
refrain from aggression against their neighbours.

" If in order to secure the conditions necessary for the
development of trade in Russia, the Russian Government
demands official recognition, the Allied Powers will be pre-
pared to accord such recognition only if the Russian Govern-
ment accepts the foregoing stipulations."*
The main and original feature of this proposal was that the
nations, including Russia and Germany, were to meet, not as
conquerors and conquered, as allies or enemies, but on equal
terms. Germany had appeared at a few Conferences during
the preceding three years, but always as a sort of prisoner at
the bar. As for Russia, she had been almost entirely isolated
from European life and politics. It was found that when she
emerged at Genoa her representatives knew nothing whatever
of the existing state of opinion in the west. They had scarcely
so much as heard of the Brussels and Barcelona and Portorosa
Conferences, and they made their first acquaintance at Genoa

* The other decisions with regard to Genoa will be found in Appendix I.,
including a resolution on an International Corporation which afterwards
materialized at Genoa. The interesting Press notice issued by the Supreme
Council is also worth reading.

14 The Genoa Conference

with the Report of the London Experts. In fact, Russia,
since the Revolution, had been almost as isolated from the rest
of Europe as in the days before the life-work of Peter the
Great.

Then the Supreme Council, which since the end of the war
had been the chief executive authority in Europe, was com-
posed solely of Allied Powers and therefore maintained the old
war alignments. Mr. Lloyd George, with that imaginative
insight which distinguishes the statesman from the electioneer,
understood that the time had come to confound those lines of
cleavage and to bring Russia and Germany once more into the
comity of European nations.

In fact the Genoa Conference, both in its inception and its
procedure, was a remarkable object-lesson in applied liberalism.
The future historian, who will judge " sine amore et sine
cupiditate et rursus sine odio et sine invidia," will do justice to
the British Prime Minister's championship of liberal principles
from the Armistice onwards. The antagonisms to this policy
were strong and only too successful, but it was much to have
had the oriflamme so bravely and boldly uplifted.

I have before me the text of the memorandum issued by
Mr. Lloyd George in the spring of 1919, just before the Peace
Conference proceeded to its final and most serious decisions.
The Prime Minister had listened to speeches whose whole trend
and inspiration seemed adverse to that genuine and lasting
peace which he himself desired to promote :

" When nations/' he wrote, " are exhausted by wars in
which they have put forth all their strength and which
leave them tired, bleeding and broken, it is not difficult
to patch up a peace that may last until the generation
which experienced the horrors of war has passed away.
Pictures of heroism and triumph only tempt those who
know nothing of the sufferings and terrors of war. It is
therefore comparatively easy to patch up a peace which
will last for thirty years. What is difficult, however, is
to draw up a peace which will not provoke a fresh struggle
when those who have had practical experience of what

Origins 15

war means have passed away. History has proved that
a peace which has been hailed by a victorious nation as a
triumph of diplomatic skill and statesmanship, even of
moderation, in the long run has proved itself to be short-
sighted and charged with danger to the victor. . . . You
may strip Germany of her colonies, reduce her armaments
to a mere police force and her navy to that of a fifth-
rate power ; all the same, in the end, if she feels that she
has been unjustly treated in the peace of 1919, she will
find means of exacting retribution from her conquerors.
The impression, the deep impression, made upon the
human heart by four years of unexampled slaughter will
disappear with the hearts upon which it has been marked
by the terrible sword of the Great War. The main-
tenance of peace will then depend upon there being no
causes of exasperation constantly stirring up the spirit
of patriotism, of justice or of fair play to achieve redress.
Our terms may be severe, they may be stern and even
ruthless, but at the same time they can be so just that
the country on which they are imposed will feel in its
heart that it has no right to complain. But injustice,
arrogance, displayed in the hour of triumph, will never
be forgotten nor forgiven."

The reader will not fail to realize the courage, the spiritual
insight and detachment of mind required to say these words,
on the morrow of the Great War and in an assembly which, to
say the least, could not be entirely sympathetic. Mr. Lloyd
George went on to deprecate the transferring of more Germans
or Magyars from German or Magyar rule to the rule of some
other nation than could possibly be helped. Then the terms to
Germany, including reparation claims, while just to the Allies
and even sternly just to Germany, were to be such as a respon-
sible Government in Germany could accept and carry out.
The settlement ought to have three ends in view :

" First of all it must do justice to the Allies, by taking
into account Germany's responsibility for the origin of the
war, and for the way in which it was fought.

16 The Genoa Conference

" Secondly, it must be a settlement which a responsible
German Government can sign in the belief that it can fulfil
the obligations it incurs.

" Thirdly, it must be a settlement which will contain in
itself no provocations for future wars, and which will
constitute an alternative to Bolshevism, because it will
commend itself to all reasonable opinion as a fair settle-
ment of the European problem."

Germany, accepting the terms, might well be admitted at
once to the League of Nations, and France had a right to
receive from the British Empire and the United States a
guarantee against any future act of German aggression.

We may still have to revise the post-war arrangements in

the light of these leading principles, which the Prime Minister

re-affirmed in January of the present year (1922) when moving

the draft resolution with regard to the Genoa Conference in

the Supreme Council. In this speech we have the impression

once more of a clear and enlightened vision, purged of the

scales of prejudice and passion. The Prime Minister dwelt

on the need of common and agreed counsels among the Allies :

" There has been too much written and said as if we

were bound to consider only the point of view — we will

not say of one person, but of one country. We must take

into consideration the feelings, sentiments, opinions,

interests, and undoubtedly the sufferings and sacrifices

of all countries."

Great Britain's policy of moderation is shown in its proper
light :

" When Great Britain has, through her representatives,
put in a plea for not rushing Germany into anarchy and
bankruptcy, we are not doing that in the interest of
Germany. What special interest has Great Britain in
Germany ? Germany is our most formidable industrial
competitor, has been, is, and will continue to be. If
Germany is wiped out commercially and industrially, and
reduced to chaos and bankruptcy, at any rate we have
this interest — namely, that a commercial rival is put out

Origins 17

of the way. Therefore, if we advocate restraint and

prudence in dealing with our competitors, it is purely

because it is in the interest of the world."

In 1919 Mr. Lloyd George had dwelt on the danger of

throwing Germany, as the result of immoderate demands,

into the arms of Bolshevist Russia, but he had not otherwise

pronounced on the problem of relations with the Russian

Government. In January he was more advanced in his view.

" There is much greater danger from Bolshevism if we fail in

the task of reconstruction than there is from propaganda which

the Bolshevists undertake." After some very faithful remarks

about treaties with the Turk but aloofness from engagements

with Russia, Mr. Lloyd George continued :

"If Russia attends, we should make it quite clear to
Russia that we can only trade with her if she recognizes
the honourable obligations of every civilized country —
namely, that she should pay all debts, whether incurred
by the present Government or by its predecessors, because
no civilized country draws any distinction between them ;
that she will compensate all nationals for loss and damage
caused to them when their property has been confiscated
and withheld ; that she will establish a legal system
which sanctions or enforces trade and other contracts
with impartiality ; that she will refrain from undertaking
propaganda to subvert our institutions and social system ;
and that she will join in undertaking to refrain from
attacks on her neighbours."

I have taken these two utterances as texts, but in many
other ways — for example, by his stern reproach addressed to
Rumania on the subject of her occupation of Hungary, in his
views and utterances on the Upper Silesian and other questions
— Mr. Lloyd George, it must be admitted, has continued
the most liberal and respected tradition of British world-
policy.

The meetings of the National Liberal Council at the Central
Hall, London, later in January of this year, gave Mr. Lloyd
George an opportunity of expounding the Genoa project to

18 The Genoa Conference

a great public assembly and to the nation outside. This speech
was " touched with emotion " throughout, and was filled
with those homely and picturesque illustrations which the
speaker knows so well how to employ. The passages relating
to the coming Conference have a special interest for us. Mr.
Lloyd George said :

" Now, there is a Conference to be held at Genoa. In
many respects it will be the greatest international con-
ference ever held. All the nations of Europe without
distinction have been invited to come there. Why have
they all been invited there ? Because we want to put
an end to these constant wars and rumours of wars,
which are just as bad or, at least, almost as bad for inter-
national business as war itself. You hear one day that
Russia is arming to attack Poland, that Poland is
organizing an insurrection in the Ukraine ; the next day
that Russia is going to attack Rumania ; and another
day you hear that Finland is about to invade some part
of Russia ; you hear that one of the States which con-
stituted the old Austrian Empire is threatening one of
its neighbours and that the neighbour is threatening back.
There is no stability in that. You cannot build up
business on that rocking foundation of earthquakes —
these rumours and rumbles in Eastern and Central
Europe. We are going to bring them together face to
face, and see whether there is any chance of getting them
to arrive at some reasonable understanding. The present
condition of things is bad for us, but it is ruinous to them.
And they must know it, because all the sensible people
are not in Great Britain.

" The gibers are beginning to say : Ah ! Another
Conference ! Forty-five nations ! A thousand experts !
What folly ! What extravagance ! Yes, what extra-
vagance— a thousand experts ; financial, diplomatic,
economic. They are cheaper than military experts.
Their retinue is a smaller one. One thousand experts !
There has just been an argument conducted between the

Origins 19

same nations which lasted four and a half horrible years.
There were thirty millions of men engaged in the con-
troversy, in that conference. There were ten millions of
young men left dead on the debating ground ; ten millions
more mutilated ; £50,000,000,000 of expense. Believe
me, better try a conference of another kind. Europe has
been left sore, bleeding, devastated, desolate, distressed.
Do give us another chance of talking together, of appeal-
ing to reason, of seeing whether we cannot get man to
listen to man, and of seeing whether the old sense of
brotherhood that is, after all, at the bottom of the human
race will not end in grasping hands and in friendly co-
operation for the whole race, and not by conflicts which
bring disaster and ruin upon all.

" If the men who come to that Conference, the states-
men who attend, go there determined to do their best,
determined to remove difficulties and not to create them,
determined to allay suspicions and not to arouse them,
determined to help and not to hinder, there will be a
great pact of peace as the result of that Conference.
And I would appeal from here, as far as my feeble voice
shall extend, not merely to the confines of this room but
even beyond — I would appeal to all men in power, to all
the rulers of men who have got the opportunity, to deter-
mine to come there in the spirit of peace ; and peace will
ensue if that is done. Without peace it is no use having
economic discussions. For that reason we deliberately
placed first on the agenda of this Conference the question
of establishing peace in Europe. We put that first.
Why ? Because unless you can do that it is no use
somebody asking the experts to discuss financial schemes,
trade credit schemes. The trader will not go out in bad
weather. He has had enough of it. He is drenched to
the skin, and there is no warmth yet to dry his clothes.
You must first of all sweep away the clouds. Give him
a fairly clear atmosphere and a serene sky and the trader
will go on and become the missionary of peace once again.

2*

20 The Genoa Conference

Schemes may expedite and may facilitate trade, but
without peace every scheme must fail.

" I have now one other word to say about the Genoa
Conference. I observe that Lord Grey and, I think,
Lord Robert Cecil, to-day think that the Genoa Con-
ference ought to have been left to the League of Nations.
I am a believer in the League of Nations. But I wish
some of its friends would not run it as if it were a sort
of a little Party show too often. They must remember
that the League of Nations was established by the much-
abused Treaty of Versailles. And, therefore, as one of
the much-abused authors of that much-abused Treaty
I naturally have a great belief in what was partly the
work of my own hands. Yet you must not run a thing
like this too hard. If you give work to the League of
Nations which, for special reasons, it is not adapted to
discharge, you do harm to the League of Nations. The
League of Nations is in the making. You cannot make
these things by written constitutions. You must create
confidence in them ; and confidence can only be created
by achievement ; and every failure which the League
could very well afford after it is well established, every
failure at this stage is a ruinous one. It is like the fall
of an infant ; it might result in a broken spine and the
infant simply limp for the rest of its days. The League
must establish itself, and it cannot do that if you are
going to entrust it with duties which it is obviously for
the moment, for special reasons, unfitted to carry through
to a successful issue.

" Why do I say that in this case ? We were anxious
to get all the nations to this Conference. There are two
nations who certainly would not be there if the Con-
ference had been summoned under the auspices of the
League of Nations, and the first of those two n ^ons is
the United States of America. I am not going to express
an opinion as to whether the United States of America
is likely to be there at all, and if I did it would do only

Origins 21

harm. But to leave it to the League of Nations to
summon the Conference is practically to rule out the
United States of America, and the responsibility then
would be ours and not theirs. Has it ever occurred to
them that Russia has refused to do anything with the
League of Nations ? We turned the League of Nations
on to Russia, I forget when, but a year or two ago, and
Russia refused absolutely to have anything to do with
it. It is not for me to express an opinion. I know
something of the reasons, from what they have said. I
am not going to discuss them. But there you have the
fact that there are two great nations whom, if you are
going to establish peace and going to get the economic
restoration of the world, it is necessary you should get
there. They would not be there if it were under the
auspices of the League of Nations ; and I should have
thought that was a satisfactory reason for what we have
done.

'" That is what we are doing to restore peace. As
the Washington Conference is establishing peace in the
great West, I am looking forward to the Genoa Conference
to establish peace in the East, until they will be like the
two wings of the Angel of Peace hovering over the world,
and the trader and the financier and the manufacturer
can go forth without fear of hidden traps and perils and
destruction ; the worker can labour without apprehen-
sion ; credit can be given and extended, and the broken
avenues of trade can be repaired, normal life resumed,
and the world march on to plenty and tranquillity.

That is our programme of Peace."

Mr. Lloyd George had to fight for his liberal-minded pur-
pose of bringing Russia and Germany on equal terms to the
international council table. He had to grapple with a sec-
tion of opinion at home which opposed the Conference before
it met, and did its utmost to obstruct and frustrate it through-
out its whole course. He had to meet also the ceaseless
antagonism of France, whose statesmen would have given

22 The Genoa Conference

the delegates of these countries, representing two hundred
million people, an inferior status, if a status at all, in the
Conference.

In his speech in the House of Commons, already cited, the
Prime Minister suggested an interesting precedent for his
proposal to restore commercial and even political intercourse
with a country under a revolutionary regime :

" Pitt was confronted with exactly the same problem
over a hundred years ago with regard to France. A revolu-
tion provoked by intolerable wrong and leading to the
wildest excesses, created bitter and fierce resentment in
this country, and he had to consider the problem of whether
it was possible to make peace with men who had been
responsible for such things. I cannot tell it better than by
giving to the House of Commons the views which he then
expressed. He first of all endeavoured to make peace with
the French revolutionaries in 1796 and failed. He sent
plenipotentiaries over for the purpose. In 1797 he made
the same attempt and again failed, and the failure was
attributed by Mr. Pitt to the fact that the French delegates
produced an impossible claim to Belgium, at the instigation
of Napoleon. This is the doctrine which he laid down, and
I very respectfully invite the attention of the House to the
words which he used :

" ' I have no hesitation in avowing, for it would be
idleness and hypocrisy to conceal it, that for the sake
of mankind in general and to gratify those sentiments
which can never be eradicated from the human heart,
I should see with pleasure and satisfaction the termina-
tion of a Government whose conduct and whose origin
is such as we have seen that of the Government of France.
But that is not the object, that ought not to be the prin-
ciple of the war, whatever wish I may entertain in my
own heart ; and whatever opinion I may think is fair 01
manly to avow, I have no difficulty in stating that
violent and odious as is the character of that Govern-
ment I verily believe, in the present state of Europe,

Origins 28

that if we are not wanting to ourselves, if, by the bless-
ing of Providence, our perseverance and our resources
should enable us to make peace with France upon terms
on which we taint not our character, in which we do not
abandon the sources of our wealth, the means of our
strength, the defence of what we already possess ; if
we maintain our equal pretensions, and assert that rank
which we are entitled to hold among the nations — the
moment peace can be obtained on such terms, be the
form of government in France what it may, peace is
desirable, peace is then anxiously to be sought.'
" The House will bear one other quotation from Mr. Pitt,
because it is very much to the point. In the same year
he said :

" ' I wish for the benefit of Europe — I wish for the
benefit of the world at large and for the honour of man-
kind, as well as for the happiness of the people of France,
although now your enemies, but who are objects of com-
passion— I wish, I say, that the present spirit of those
rulers and the principles they cherish may be
extinguished, and that other principles may prevail
there. But whether that is to be so or not is more
immediately their concern than ours. It is not to any
alteration in that country, but to the means of security
in this that I look with anxiety and care. I wish for
peace, whether their principles be good or bad ; but I
do not wish to trust to their forbearance. Our defence
should be in our own hands.'

" Those are the principles upon which we can proceed
in approaching this difficult and dangerous project of
endeavouring to make peace with a Government whose
principles are just as odious and whose actions are just as
loathsome as were those of the terrorists in 1792, 1793,
1794, and afterwards in France. Mr. Pitt failed, entirely
through the fault of the French revolutionaries. He had
an embarrassment from which I am not suffering. He had
a good many Die-hards in his Cabinet. In fact, I believe

24 The Genoa Conference

the most brilliant Member of his Cabinet took very extreme
views on that subject. But in spite of that difficulty with
which he had to deal, and from which I am absolutely free,
Mr. Pitt put forward those proposals, and it was only the
folly of the French revolutionaries themselves that was
responsible for the failure. Mr. Pitt realized that unless
peace were made with the French revolutionaries there
would be no peace for many a long devastating year, and
there was not for eighteen years after that period. [Hon.
Members : ' We are at peace ! '] We are not at peace ;
I am not sure that present conditions are very much better
than war, except for the actual fact that war is no longer
in progress. But we have the effects of war in many ways,
and one is the closing down of Russia. There is no inter-
course with that country, and, let me point out, that there
will not be until peace is established. I am going to speak
quite frankly.

" I do not believe you are going to restore trade, busi-
ness and employment until you appease the whole of
Europe. Until you establish peace over the whole of
Europe there will be a standing element of disturbance,
and trade will not go on."

Mr. Lloyd George then proceeded to deal with the Russian
question more specifically. The resumption of trade with
Russia would open up that country in more than one sense.
It would discourage those wild rumours which a revolution,
largely post-scenic, always generates. People would get to
know the facts about Russia, and that would in turn re-act
favourably on the renewal of commercial intercourse. Then
it was necessary, if there was to be any general European
disarmament, that the enormous " Red " forces existing in
Russia should be dispersed or reduced, but that could not
be until mutual knowledge and confidence were restored.
' Once more, Europe needed what Russia could supply.
Before the war a quarter of the exportable wheat supply of
the world came from Russia ; millions of tons of barley and
'^ rye ; great quantities of other necessary food supplies ; mil-

Origins 25

lions of tons of manganese ; two-thirds of the flax required
for Europe ; half the world's output of hemp ; half the timber
imported into the United Kingdom. Russia, in fact, was the
greatest undeveloped country in the world. It had labour,
it needed capital, and it would not get capital without security,
confidence and peace, internal as well as external. Moreover,
Germany could never pay the full demand of reparation until
Russia was restored.

The Prime Minister then proceeded to discuss the condi-
tions of peace as laid down in the Cannes resolution, with
which the reader is already familiar, and concluded with some
remarks on the recognition of the Russian Government,
which we shall consider at a later point. We need not follow
any further this debate in the House of Commons, but simply
observe that the Government obtained its vote of support
and confidence by a majority of 278.

Meanwhile the to be or not to be of the Conference had
been an open question since the Cannes meetings, owing to
the reluctance of the French Government and people to take
part in it. The end of the Cannes Conference was almost
tragically sudden. Mr. Lloyd George, for the British Govern-
ment, had offered France a treaty, or " pact," securing to her
the armed assistance of Great Britain against any unprovoked
invasion of French soil, the guarantee to last, in the first
instance, for ten years.

This offer was subject to no conditions, but it was closely
linked with an earnest British invitation to France to join
England in the task of European reconstruction. In a state-
ment made by the British to the French Prime Minister, dated
January 4th, 1922, which is still pleasant and instructive
reading, the two propositions are made in close succession.*

It is characteristic of French mentality in these days that
even the rumour of these discussions at Cannes cost M.
Briand, the French Premier, his political life. He had gone
to Cannes pledged to maintain intact the whole Treaty of
Versailles. French opinion had been disgruntled by the

* See Appendix II., where the terms of the proposed Pact are also given.

26 The Genoa Conference

failure of America to ratify the Anglo-American guarantee
treaty. Such a limited insurance as was now proposed in
the Pact, though it unquestionably represented the maximum
which the British people would undertake, seemed a poor
substitute. M. Poincare, who succeeded M. Briand, proposed,
indeed, a close military alliance between England and France,
lasting a generation, which would have committed us effectually
to the support of French policy in Europe and made it im-
possible for us to move for any revision, however desirable
and necessary, of the Peace Treaties against French disapproval.
Great Britain and the British Empire would never have
dreamed of thus roping themselves to the French chariot
wheels, and the Conference of Genoa scarcely encouraged the
renewal of any offers even of a limited military pact with the
French Republic.

These terms proposed at Cannes were therefore no great
inducement to France to work with England for European
pacification and repair. France was intent on the literal
fulfilment of the Peace Treaty and its adjuncts. She was
ready to apply the severest sanctions in case of German
recalcitrance. Her interest in the commercial and economic
revival of Europe was not so pressing as that of England,
who depends for her existence on oversea trade. Moreover
France, with every excuse, was not particularly anxious to
see a restored and prosperous Germany, however essential
that might be to the world's welfare. Towards Russia her
feeling was of the bitterest antagonism owing to her old ally's
defection during the war and the repudiation of a pre-war
debt whose bonds were largely held by multitudes of poor
and simple folk in France. The nightmare of a Russo-German
military alliance with its point against France also weighed
on the French imagination. To many persons the French
attempts to continue the ostracism of Russia and Germany
seemed the unlikeliest method of laying that phantom.

It is not surprising, then, that France should do her utmost
to obstruct and postpone the Conference for which Italy had
offered the hospitality of Genoa. A Ministerial crisis in

Origins 27

Italy also helped to defer the meetings and it soon became
ipparent that the original suggestion of March 8th was not
practicable.

The French Government was morally, if not legally, bound
by the Cannes resolution in favour of the Genoa Conference.
But French opposition to the Conference showed no sign of
abating, and at the end of February the intentions of France
were so problematic that Mr. Lloyd George sought an interview
with the French Premier. M. Poincare' had the lawyer's love
of legality and formalism. He was not devoted to the method
of tete-a-tete conversations and was all for returning to
the older diplomacy with its interchange of Notes which
could be officially docketed and filed. He would have pre-
ferred to deal with the British Premier in this formal way.
Indeed his idea was that England and France should draw
up a stereotyped programme for Genoa by means of such
an interchange of diplomatic messages. The menu so ar-
ranged was to be served to the assembled Powers, who would
be at liberty " to take or leave it." Genoa, in short, was
to be an ultimatum, resulting in a sort of formal and binding
contract.

Mr. Lloyd George's object and method were quite different.
He had no liking for the cast-iron methods of the old diplomacy.
He believed in bringing people together in free and unfettered
conversation, perhaps partly for the reason that he was himself
well equipped for success in these frontal and personal palavers.
In his speech in the Central Hall, in January, he had given
amusing expression to this preference :

" There is only one way to effect a gradual improve-
ment and ultimately reach the goal, and that is by in-
sisting on bringing the nations to the test of reason and
not of force. How are you to do that ? By insisting on
meeting, discussing, reasoning — let us say the word,
conferring. If there had been a conference in 1914 in
July there would have been no catastrophe in August.
It would have been impossible. You watch it. It is

28 The Genoa Conference

my business to watch it. This is what happens when
you do not meet and interchange views : misunder-
standings arise ; misunderstandings ripen almost into
antagonisms ; fierce controversies begin. If after an
interval you have a conference, misunderstandings dis-
appear, suspicions are removed, there is an improved
temper ; and although you do not achieve the ultimate
result, you get nearer to it. No, it is true that you cannot
point to a single conference that has settled European
entanglements, but each conference is a rung in the ladder
which enables you to reach ultimate peace on earth.

" There are those who would go back to the old diplo-
macy, who say : ' Let us get rid of conferences ; let us
interchange despatches and letters.' What happens ?
Each party states its own point of view. Instead of
bringing parties nearer it too often hardens them in their
convictions. You cannot have it out with a letter. You
cannot argue with a despatch. You cannot reason with
a diplomatic message. Come face to face. I have a
profound conviction and faith in the ultimate reason of
man. I am an optimist. I believe in my fellow-men
made in the image of God — that, if you bring them to-
gether to talk quietly and calmly in a room, in the end
reason prevails.* And it shocks me that the greatest
appeal for the return of the old diplomacy comes from
the land which has been devastated by it. If you had
had conferences and the new methods you would not
have had ten Provinces of France now awaiting repair.
It is no use gibing at conferences. It is very easy to gibe.
The men who hate conferences are the men of rigid views ;
the men of vague phrases ; the men who dislike facing
realities. Because once you are in a conference there is
somebody, at any rate, who brings you face to face with
the realities. There are people who have never looked
a reality in the face, and it is a good thing to force them
to do it now and again. All those who are anxious

* This truth was illustrated more than once at Genoa.

Origins 29

for peace and are encouraged to tread the only path that
leads to peace believe in face-to- face discussion."

Such was Mr. Lloyd George's exposition of the philosophy
of conference. His meeting with the French Premier at
Boulogne, on Saturday, February 4th, was his substitute for
that antiphony of written notes which M. Poincare's legal
and official soul desired. The British Prime Minister even
offered a second meeting if one were insufficient to produce
a general understanding. The communique subsequently
issued with regard to this meeting at the Sous-Prefecture
in the French watering-place announced " a friendly under-
standing on all points with which the Premiers dealt." " The
two Prime Ministers," it was stated, " were particularly
concerned with the Conference of Genoa, and put themselves
entirely in agreement on the political guarantees to be secured
in order to prevent encroachment either on the rights of the
League of Nations or on the Treaties signed in France after
the Peace, or on the right of the Allies to reparation." Mr.
Lloyd George is understood to have brought things to an
immediate issue by the point-blank question whether the
French were going to Genoa or not. In case of a refusal, the
further question would arise whether Genoa should be aban-
doned or the other Powers go without France. A Conference
under the latter conditions would have been a very lame affair.
However, the British had the moral opinion of the world
behind them on this occasion, and France could scarcely
do otherwise than participate.

Boulogne justified the British Prime Minister's faith in the
personal conversation. M. Poincare was brought back to the
Cannes position as it had been adopted by M. Briand. All
the intermediate evadings and conditionings were swept away,
and France came in frankly on the lines of the Cannes resolu-
tion. This by no means implied, as we shall see, that British
and French were in general agreement on the various questions
to be taken up at the Conference. But the holding of the
Conference with France, Russia and Germany included, and
included on equal terms, was henceforth assured. No

so The Genoa Conference

unnecessary delay was to be allowed, and the first meeting
was dated for April loth. When Mr. Lloyd George met
M. Poincar6 in Paris, en route for Genoa, the British assured
the French Premier that the Boulogne agreement still held
good. Mr. Lloyd George is said on that occasion to have put
a few penetrating questions. Was France going to give her
help in the Italian city, or was she intending to pursue an
independent, perhaps even a destructive policy ? The British
democracy would not forgive any Power or Powers which
might adopt an attitude imperilling the success of the Con-
ference. To these heart-searching inquiries M. Poincar<§
replied that he purposed to do all in his power to make the
Conference a success, and within the limits of the Boulogne
agreement would give unswerving support to the Allied
programme. His desire was to see the closest Anglo-French
entente, not only at Genoa, but everywhere else.*

The reader will have noticed that reparation and disarma-
ment did not fall within the scope of the Genoa Conference.
But these subjects were not ruled out as was inaccurately
supposed in England, owing to the insistence of France at
Boulogne. The inclusion was, no doubt, originally made
in deference to French wishes, but it was made at Cannes.
The Powers at Genoa were reminded by the President at
the inaugural meeting that in accepting the invitation to
the Conference they had ifiso facto accepted the terms of the
resolution, which were brought specifically to their notice in
the inviting letter. The reservation of these questions was,
no doubt, unfortunate. They were so closely allied with the
subjects of discussion that to exclude all reference to them
was impossible. One witty delegate remarked that you
might cast disarmament and reparations out at the door,
but they would make their entrance through the window.

On the eve of the great invasion of the Italian city, spiritual,
as well as material, preparations had been going on. The

* At this time the French President, M. Millerand, was paying an official
visit to the French dominions in North Africa. M. Poincare, the French
Premier, was thus prevented from personally attending the Conference.

Origins 81

Archbishop of Genoa, a delightfully genial ecclesiastic, small
and plump in stature, whose scarlet robes and joy-diffusing
smiles were familiar at most of the public festivities during the
Conference, had issued a pastoral letter to his loving flock,
with appropriate counsel on the approaching world-event.
This drew a pronouncement from the new Pope, which was
criticized in some quarters as savouring rather strongly of
pro-Germanism. To most readers its savour will be rather
of Christian charity and wholesome common sense. It ran
thus :

" Venerable Brother, — We have read with great
pleasure the letter which you addressed so opportunely
to your people on the occasion of the International
Conference which for the first time brings together in
peaceful discussion in your glorious city victors and
vanquished, and in which centre the hopes of all nations.
" As representative of the God of Peace and Love,
who with special care respicit super egenum et pauperem,
and who in his inscrutable wisdom called thus unex-
pectedly upon Us to undertake, together with the succes-
sion of the supreme Pontificate, the mission of peace
and goodwill of our lamented Predecessor, We both pray
and confidently trust that the envoys of the Powers
will consider the miserable conditions with which all
nations are contending, not only with a calm mind, but
also with a readiness to make every sacrifice on the altar
of the common welfare, which will be at once the first
condition for an effectual remedy for the evil and the first
step toward that universal peace which all desire above
everything.

" If even amid the clash of arms, in the language of
the beautiful motto of the Red Cross, inter arma caritas,
Christian charity prevails, so much the more should it
do so when arms have been laid aside and peace treaties
signed ; and this all the more in that international ani-
mosities, the melancholy legacy of the war, work to the
detriment even of the victors, since they prepare for all

82 The Genoa Conference

a future fraught with fear. It should not be forgotten
that the best guarantee of security is not a hedge of
bayonets, but mutual trust and friendship. And even if,
from the procedure of the Conference, must be excluded
all discussion, not only of treaties previously concluded,
but also of reparations which have been imposed, this
does not seem to bar eventual exchanges of view which
should have the effect of facilitating to the vanquished
the early fulfilment of their obligations which would in
the end be to the advantage of the victors.

" Animated by these sentiments of equal love for all
nations with which the mission entrusted to Us by the
Divine Redeemer inspires Us, We extend to all the
faithful that invitation, which you, Venerable Brother,
addressed to your people, and exhort them to join their
prayers to ours for the success of the Conference. May
God's blessing be upon it ; and from the decisions which
as we are confident will be taken based on the understand-
ing of love, may there be reflected upon poor humanity
that much-desired concord, which, by uniting the nations
in brotherly love, may once more lead them, after eight
years of misery and ruin, to the clear road of work, progress
and good citizenship. Thus let there be realized the
ideal of the Church, which, as Saint Augustine rightly
says in ' De Moribus Ecclesiae Catholicae, I. 30 ' : ' Gives
civibus gentes gentibus et prorsus homines primorum
parentum recordatione non societate solum sed quadam
etiam fraternitate conjungit.'

" With this fervid prediction, We bestow upon you,
Venerable Brother, the clergy and people of your blessed
Archdiocese, the Apostolic Benediction.

" Signed : Pius P., P. XL"

All was now ready for the great event, and in the days
before April loth the pilgrims of thirty-four nations were
converging on Genoa from every point of the compass.

Villa <L> Albertis, Quarto dei Mille, Residence of .Mr. Lloyd George
at the Conference.

To fai-e jiage 32.

CHAPTER II

THE SCENE

IT was very appropriate that the great economic Con-
ference should meet in Genoa. That magnificent city
was for centuries a leader in world-trade. It has lived and
thriven on the water. Indeed, it used to be seriously believed
that the city was founded by Japhet, the son of Noah, who
built it in very early post-diluvian times. This interesting
circumstance, and the supposed derivation of the city's name
from the Latin word janua, seemed to be of good omen,
Genoa and its Conference, we might hope, were destined to
rise and to raise the world from the disastrous deluge of the
Great War, and this radiant city might prove to be the gate-
way from our present world-discontents into the new and
better era which lies beyond.

I am writing these words in Genoa, under the cloudless blue
of an Italian spring day, and just within hearing of that classic
sea whose sapphire water is whitening into mellow foam on
reef and strand. Many guide-books have sufficiently depicted
Genoa. I agree with the entry which Mr. Howells found in
his note-book, that this is the most magnificent city ever
built by human hands. It is literally a city of marble palaces.
Its interest to eye and memory and imagination is
inexhaustible. It was down such narrow- winding, shuttered
alleys as these, leading from the main streets, that the
Montagus and Capulets of the old days chivvied one another
in the pursuit of their secular vendettas.*

* It is dangerous in the case of an imaginative genius like Shakespeare
to say that because he reproduces so vividly and truly the Italian life and
character he must have visited the country. But always in Italian towns
one is impressed with the marvellous imaginings of the essential spirit of
the land in Shakespeare's Italian comedies.

33 3

34 The Genoa Conference

At other times one is transported into the stage-setting of
some half-forgotten Italian opera. I remember standing on
the day of the inauguration in the Piazza outside the Palazzo
di San Giorgio, among the Bersaglieri and other troops who
surrounded the square. It was a splendid feat of unconscious
stage-management, and it seemed possible that at any moment
one of these picturesque warriors might step forward and with
an eloquent gesture begin an Italian aria.

But one of the chief charms of Genoa is that it stands on
such a varying level. The eye is always being carried upwards
from the depths of the glorious but narrow and shadowy streets
to balconies and terraces and arcades lifted into the solid blue
and the open sunshine. I remember first walking up the
broad marble stairways of the University buildings and
arriving at last, not at the roof and the chimneys, but at a
lovely further flight of stairs in the open air and sunshine
leading upwards into a fragrant tropical garden with quiet
" pleached alleys/' where Benedict and Beatrice may have
bandied jest and repartee, and uplifted terraces affording
a lovely view over the domed and towered city and the
deep-hued sea beyond. It was a pleasaunce which gave a
visitor fresh from the darkness and cold of an English winter
and spring a sense of having died and gone to Heaven. Genoa
is an endless feast for the eye and the imagination and suggests
the most painful comparisons with the cities in which the
British " populus imperator " is contented to dwell.

The city calls herself with a well-justified complacency
" La Superba," and she laid herself out to be as superb as
possible in her reception of the delegations and journalists
who descended upon her in the early days of April, 1922.
In outward aspect she can have needed little preparation.
During the centuries of her great history she has accumulated
art and architectural treasures and stately civic traditions
which make it easy for her to exercise a noble and impressive
hospitality. Her sixty marble palaces would have provided
the festal framework for half a dozen such Conferences as were
now to meet within her walls.

The Scene 35

But Genoa had embellished herself in many ways. She had
hung out everywhere her bright tricolor, and many a stately
vista of street and square was thus enriched. Palaces, hotels,
and villas, not only in Genoa but along the Ligurian Riviera,
were prepared for the reception of the delegates. The British
official headquarters were at the Hotel Miramare, a splendid
marble edifice commanding a wide view over Genoa and
out on to the blue Mediterranean. But Mr. Lloyd George and
his ministerial colleagues and secretaries resided at the Villa
de Albertis, an elegant mansion a few miles to the east. The
other delegations were lodged in equal splendour and luxury.
The presence of the Bolshevik leaders presented a rather
embarrassing problem, as their security outside the Russian
frontiers might conceivably be precarious. They were lodged
at Santa Margherita, near Rapallo. The railway line between
that lovely spot and Genoa was guarded by numerous troops,
and a ship of war lay at anchor in the adjoining bay. The
Italian Government paid the expenses of the deputations ot
the Convening Powers but not of the other countries. Even
so, the expense of this lavish hospitality must have been
considerable. But Genoa was proud of having thus been
made the centre of the world's hope and interest and was
determined to make the occasion another memorable event
in her rich and adventurous history.

Thirty-four nations were formally represented at Genoa.
But there were other self-invited and informal delegations
who had come to look on and do a little business on their
own behalf. Angora, Georgia, India and many other regions
were thus represented. When we reflect that all these nations
and tribes had sent their wisest and most distinguished repre-
sentatives, that financial, economic and political experts of
worldwide repute were present in crowds, we can imagine
what a concentration of power and wisdom and fame was
focussed on to this ancient city by the Midland Sea. Here
we had at last, if only in temporary session, that Parliament
of Man towards which the hope of the world has been so long
and so wistfully directed.

3*

36 The Genoa Conference

The headquarters of the Conference and the seat of the
General Secretariat were at the Palazzo Reale, in the Via
Balbi, whose gorgeous halls and bedrooms and other apart-
ments were filled with the incongruous appurtenances of labour
and business. Through the guarded portals of this palace,
which seemed to open beyond into a vista of sun and sea, rolled
the shining motor-cars of the personnel of the various com-
missions and committees which held here their formal sittings.
But not the least decisive gatherings took place outside, in
the hotels and villas of the delegations, where opinion was
unceasingly ventilated, where the propagandists turned their
wheels and the terrain of countless intractable questions
was broken by preliminary palaver.

On such occasions the journalists, who command, or are
credited with commanding, all the oracles of praise and blame,
may be sure of considerate and even preferential treatment.
The Genoa Conference was no exception. The ancient Palazzo
Patrone in the Piazza della Zecca was assigned and equipped
as the headquarters of the " Presse mondiale." The marble
staircases and the rich frescoes on wall and ceiling bore witness
to the pristine splendour of the place. But now it was con-
verted into a factory of public opinion. That illusion was
strengthened by the ceaseless clatter of innumerable type-
writers. Such a whirl of telephoning and telegraphing and
typewriting and talking was perhaps never known before.

I wish it were possible to acknowledge the courtesy and
kindness of the Italian managers of the Casa. To Dr. Ernesto
Artom, the President, Dr. Giuseppe Gentile, Vice-President,
Comm. Giuseppe Melli, General Secretary, Conte Amedeo
Ponzone, Conte Papa di Costigleole and other assistants,
the journalists who assembled in Genoa are under many
obligations.

In and out of the Casa della Stampa passed the pressmen of
thirty-four nations. There were journalists old and young,
journalists clean-shaven or square-bearded like Assyrian bulls,
blue-eyed journalists from the midnight sun and squidgy-
eyed Mongolian journalists, lady journalists combining per-

C'asa d'.'lla Stainpa. C'oni'erenee 1'ress Centre at Ger.oa.

The Scene 37

sonal charm with business-like efficiency, learned and spectacled
journalists from the Fatherland, excitable and gesticulating
French journalists, and English journalists well-groomed and
undemonstrative — all sorts and conditions of the soldats de
la pensee, as M. Canapa of Genoa obligingly described the
members of the profession as a whole. Some writers it seemed
almost impossible to assign to any known geographical unit.
But, strange to say, one member, who seemed quite intensely
foreign in dress and complexion, turned out to be merely
English with a familiar English name. There was a charming
young American married couple, correspondents of the same
paper or group of papers in the States. The young lady her-
self hailed from Honolulu. They seemed to be almost
eine Seek und ein Gedanke, and they wrote their articles with
their handsome little heads quite close together. A more
perfect human companionship could scarcely be imagined.
And all this polyglot crowd was animated by that spirit of
craft-comradeship which is lifted above the distinction of
race and language and creed.

Never was a body of people so talked to, so courted and
admonished and instructed, so played upon by conflicting
forces, as the journalists at Genoa. The heads of the various
delegations would sometimes invite the entire Press to a
symposium. Or they would receive in turn the journalists
of different nationalities. Regular hours were fixed, for ex-
ample by the Russian delegation, for such receptions. M.
Rakowsky's daily statements at the Hotel de Genes, and
afterwards at the University, were specially popular owing
to the attraction of the man and the novelty of Russian
politics.

The Anglo-American Press had two daily meetings at one and
six o'clock in the Professors' common-room at the University
in the Via Balbi. Here the news-hungry pressmen were fed
as regularly, if the comparison be not invidious, as the animals
in the Zoological Gardens. The officiers de liaison between the
Conference and the British Delegation on the one hand and
the English-speaking journalists on the other were Sir Edward

88 The Genoa Conference

Grigg, K.C.V.O., Mr. Lloyd George's able and laughter-loving
private secretary, and Mr. W. K. McClure, late correspondent
of The Times at Rome and first honorary secretary of the
British Embassy there, a gentleman of rare linguistic accom-
plishment and an extensive and esoteric experience of European
politics. These gentlemen, either alone or in combination,
expounded to the journalists twice a day the shifting phases
of the political situation. Here, too, the more important
documents issuing from the Conference were sometimes
available in sufficient quantities. It would be too much to
say that the hunger and thirst of the journalists were, or
could be, always stayed at these hours, but everybody, I
feel sure, would pay his tribute to the fullness and fairness
and frankness, as well as the humour and good-fellowship,
with which the news and the interpretation thereof was
communicated to the correspondents for transmission to the
papers and agencies they represented in Great Britain and
America.

Here the journalists were sometimes favoured with visits
from statesmen who wished to instruct or inspire the public
opinion of the English-speaking world and through that of
the terraqueous globe in general. Sir Robert Home, that
jovial keeper of the British purse and the hero of thousand-
million-pound Budgets, came down on one occasion and
expounded the existing situation. Then the Lord Chan-
cellor, Lord Birkenhead, whose agreeable yacht was anchored
off Genoa, came ashore on April 24th, and visited us one
afternoon. He was arrayed in full nautical costume and
suggested nothing so remotely as full-bottomed wigs and
law reports. His speech was eloquent, perhaps over-eloquent
for the occasion, and remarkable for a passage which seemed
to foreshadow an early recognition of the Soviet Government.
In briefer summary this is what his Lordship said :

" There was (quoth he) no swift and easy way to
economic salvation. Many mischiefs, however, were
capable of alleviation by wise statesmanship. They had
to see what salvage they could get from the war. He

Sir Edward Grigo-, K.C.V.O.. C.M.G., Private- Secretary to
Mr. Llovd George.

The Scene 39

dwelt at great length on the interdependence of trade,
the necessity of reconstructing the stricken markets of
Europe, and of making Europe worthy of credit.

" Russia's teeming population must participate in
the reconstruction of Europe. Every nation was entitled
to decide upon its own form of government, even if it
should take a form irreconcilable with humanity and
civilization. They had to assume that the Soviet re-
presentatives knew why they were at Genoa. These
Soviet rulers were not fools, otherwise they would not
have retained so long unchallenged control of such a
vast area. What Russia had to give was little indeed
compared with what the other nations could give to her,
and the Soviet representatives were aware that the
first condition of the reconstruction of Russia was to
bring her into harmony with the fundamental principles of
European policy.

" If Russia, the Little Entente, and others realized
that even for two or three years there would be no fear
of attack from either side the energies of these countries
would be devoted to pacific problems.

" He saw signs of a general realization among the
nations at Genoa that there were materials for agreement,
and there were growing signs of impatience with any who
tried to prevent harmonious conclusions. The public
opinion of Europe would lead to the realization that such
conclusions were procurable and that they ought to be,
and should be, obtained.

" He appealed for patience, and said that the crises
which had arisen during the last fortnight had proved
very capable of treatment, and presented no great diffi-
culties. ' What a tragedy if the Genoa Conference
failed. We should be met with one of the blackest
moments since the Middle Ages. Genoa may be more
pregnant to the future than the Conference of Paris.
Never again in history will there be such a gathering as
this. Let us see, therefore, in Genoa, the germ of the

40 The Genoa Conference

realization that the late war will be the last, that no
longer will Europe be a collection of armed camps. Let
us see in it the development of an era of prosperity.' "

Then on May 8th, on a lovely afternoon, when the marble
courts of the University and the staircases leading up to
gardens and orange-blossom were cool after the heat of a sub-
tropical day, who should come to our Sala dei Professori with
Sir Edward Grigg but the British Prime Minister himself !
And this was not the only time we were favoured with such
a condescension from Olympus. But I must leave these par-
ticular events to the course of the narrative.

Another institution founded for the behoof of the world's
Press assembled in Genoa was the Albergo dei Giornalisti,
two new blocks of flats of palatial beauty in the Via Corsica,
commanding lovely and refreshing views of the harbour, the
blue Mediterranean and in the distance the snow-clad summits
of the Piedmontese Alps. It was a happy thought to establish
the hostel here, as the Albergo was full of sun and sea-breeze
and provided a welcome retreat from the noise and heat of
Genoa and the Casa della Stamp a. The appointments and
the service, the morning coffee and afternoon tea and, one
must add, the luxurious baths available at these cool marble
palaces were no unimportant ensample of the thoughtful
consideration with which Genoa and Italy had prepared for
this formidable invasion.

The only qualification of the delights of the Albergo was the
noise. A certain dog which, from the volume of its bark,
one would judge to be about the size of an elephant, and which
continued its song through the whole night, caused some
removals within the Albergo and a great deal of unavailing
and perhaps uncomprehended protest. One could only reflect
on the tolerance of a world which permitted a person to keep,
apparently for barking purposes, an animal which made
every tenement within its hearing, at least for a non- Italian,
uninhabitable.

At six o'clock in the morning, when Cerberus was growing
hoarse, though still unwearied, the housewives began. There

The Scene 41

were a number of extensive insulce of flats at some little
distance from the Albergo. The lady tenants or housemaids
of these suites began operations by throwing their rugs and
carpets across the balconies and belabouring them with
a flat, long-handled beater made of cane and shaped like a
tennis or badminton racquet. On the Sunday morning, when
the King of Italy arrived by sea, just opposite our balconies,
the other war-ship already in harbour saluted His Majesty
with its heavy guns. Even that was a less effective reveillee
than the noise made by a battery of these Genoese house-
wives. Somebody once shook a menacing fist at one of these
performers, but she either did not or could not understand
and resumed her bastinado with the fury of a Maenad. I can
still see these flagellants with their heads bent low over their
balconies and punishing with muscular uplifted arms the
lower portions of their unoffending carpets. It must have
been an exceedingly good exercise to begin the day with.

Genoa is, indeed, not only the loveliest and most magnificent
of cities but surely also the noisiest. The pavements are
constructed with large square cobbles and most of the streets
are mediaevaliy narrow, so that every ounce of noise is
extracted from every wheel. Conversation was quite impossible
in the little autobus which conveniently plied, free of charge,
between the Albergo and the Casa. There are no regulations
about the silencing of motors, and, as some of the streets have
no footpath at all, the horn has practically to be kept going
and produces, therefore, very little warning effect. Moreover,
the horse-driver loves to play his part in the orchestra by
cracking his long whip with the suddenness and sharpness
of a revolver shot. Italian towns seem to have had this
particular character from the remotest times, and one can
sympathize with Horace's delight in escaping from the " fumus
strepitusque Romae."

But this was a very unimportant fly in the exquisite and
perfumed ointment of Genoa. The social aspect of the Con-
ference was remarkable for its variety and splendour. Dinners
and receptions, concerts and excursions, festivities of all

42 The Genoa Conference

kinds, enlivened and even embarrassed the daily task of delegate
and journalist. I have said that no city in the world is so
richly equipped with the amenities for a stately and magni-
ficent hospitality. The public receptions in various palaces
were riots of regardless and indescribable splendour. One
recalls particularly the soirees at the Palazzo Municipale and
the Palazzo Ducale. The former communicated by broad,
flower-vased terraces with the equally opulent salons of the
Palazzo Bianco, and through this dream of marble mosaic
and glowing fresco, gold and scarlet furnishings and accumu-
lated treasures of art, the thousand guests wandered at will —
a simmering throng diversified with the steel and silver and
red of military and ecclesiastical uniforms.

The arrival of M. Tchitcherin and the other Russian delegates
was awaited on such occasions with great interest. The
chief delegate, having arrived at the gateway of the Palace,
was hustled inside by a crowd of Genoese fellow-communists
who crowded round him in order to intercept any explosives
which might be going, though there was never much danger
of that sort. Once inside, M. Tchitcherin was almost mobbed
by an inquisitive, if not an admiring, throng who besieged him
for autographs and other mementoes. Whether the Russian
revolutionary's dislike of the bourgeoisie was inflamed or to
some extent appeased by these attentions it is not possible
to say.

The refreshment of such a multitude with wines and ices
and exquisite cakes of every species must have been a problem.
But it was carried out swiftly and efficiently by countless
waiters who quickly entered the salons when the hour came
and passed rapidly through the crowds bearing great trays,
generously laden with these dainties, on one deft and uplifted
hand. And always and all the time one had that feeling of
taking part in some mediaeval pageantry, with which one
becomes so familiar in Genoa. In these Palace receptions
one almost expected to see the partisans of rival factions
appear, to witness the sudden fracas, the clash of steel and the
tragic stain on the floor.

Palaz/.o Munieipale, Via Garibaldi.

The Scene 43

Among the trips to which we were invited by our Italian
hosts I particularly remember one to Portofino Vetta, a
hostelry high up on the cliffs to the east of Genoa, affording
a great prospect over the piled and tumbled mountains behind,
and along the whole magic coastline of the Ligurian Riviera,
ending, in the far west, in the snowy summits of the Pied-
montese Alps. The colours of the sea were entrancing. When
we arrived it was of a rich turquoise and violet, exactly Homer's
toefSai TTOVTOV, but later it was transformed by some wizardry
into a perfect welter of opals.

After a pleasant but clamorous luncheon some of us detached
ourselves from the official party and walked by a winding
cliff path through olive woods and fruit orchards along and
down the cliffs to the little village of Portofino a Mare, or
Porto San Giorgio, far below. This has been described as
the loveliest spot in Europe. It is indeed almost freakishly
beautiful. The coast of the Riviera di Levante here suddenly
improvises a picturesque promontory which cuts off and
protects a tiny harbour resembling a marble cup filled with
sapphire water, round which the little village clusters. One
might repeat of Portofino what Catullus wrote of another
place not very far away :

Ille terrarum mihi praeter omnes
Angulus ridet.

The loveliness of the Ligurian Riviera culminates, we may
say, at Portofino.

Genoa, I think, is not much devoted to music. That art
figures surprisingly little in its rich and elaborate hospitality.
But we had performances of Aida and Mefistofcle at the
Opera House, and one very brilliant concert there, remarkable
for the astonishing virtuosity of a young violinist, Signorina
Lina Spera, who is surely on the threshold of a European and
world reputation. Genoa was the birthplace and home of
Paganini, an interesting portrait of whom hangs in the Palazzo
Rosso. Mademoiselle Spera would have been a dangerous
rival of the diabolic fiddler.

44 The Genoa Conference

No one who took part in the life and work of the Genoa
Conference will readily lose the vivid impression of his visit
to this radiant city under such happy conditions, or his sense
of gratitude to the civic and national authorities and to a
people of high and ancient culture for the unaffected kindness
and courtesy of their welcome.

CHAPTER III

THE INAUGURATION

THE great inaugural ceremony at which the Genoa
Conference was fairly launched on its adventurous
voyage took place at three o'clock on Monday, April loth.
Out of the many palaces at Genoa the one chosen for this
historic occasion was of happy omen for the British, bearing
the name of England's patron saint, of the British Sovereign
and the British Prime Minister — the Palazzo di San Giorgio.*
This is the oldest and most interesting, but not the most gor-
geous of the Genoese palaces, having been built by Guglielmo
Boccanegra, Captain of the People, after a drawing by the
Friar Oliviero, a great architect of those days. For several
centuries it was the seat of the famous Bank of St. George,
but even before this it seems to have been concerned with
financial transactions, for it was here, I understand, that the
ransom of our King Richard Cceur-de-Lion was paid. One
seems to pass through its portals right into the Middle Ages.

The Palace faces on one side a broad, open space called the
Piazza Caricamento, a sort of market square, which on this
occasion was kept open by large bodies of troops, the Genoese
people being held back some little distance up the various
narrow streets leading downwards from the city on to the
Piazza.

Bersaglieri, Carabinieri, cavalry, gendarmes in various
picturesque uniforms, contributed to the setting of a perfect
Botticellian tableau, such as the visitor to the National
Gallery in London may see in many an old Italian painting.

* There was no truth in a subsequent rumour that the Italians intended to
change th« name of th« Palace to the Palazzo di San Lloyd Georgio.

45

46 The Genoa Conference

The main personages of the various delegations arrived at
one end of the Piazza, where they were halted before entering
the Palace and photographed by innumerable camera-artists.
At the opposite end of the Palace the invited guests, journalists,
and subordinate members of the delegations rolled up in their
motor cars.

Passing between files of brilliant grand opera figures, we
mounted the stairs to the hall, the Sala dei Compratori, in
which the great ceremony was to take place. Long before
three o'clock this was well filled with the polyglot delegates
of the thirty-four nations, with many invited guests, and in
the gallery a number of journalists who had been fortunate
enough to obtain tickets, the number of which was rather
severely restricted. The civic broadcloth worn by most of
those present was relieved by the dresses of the ladies and
the silver braid and other trappings of military and eccle-
siastical dignitaries. Along the walls of the Sala sat the
sculptured figures of old Genoese merchant princes, the
Antonios and Leonatos of the Shakespearean plays, who
with their faces turned towards the chair seemed to listen
intently from their niches to proceedings which in their
lifetimes would certainly have interested them.

To an Englishman isolated among many foreigners it was
pleasant to observe the interest with which the British Prime
Minister and his colleagues were awaited. When at last the
familiar figure appeared, easily distinguished by the silvery
hair and a certain leonine cast of countenance, there was a
great ovation amid which Mr. Lloyd George advanced to his
seat on the left of the presidential chair. Even from the
opposite end of the hall one could sense the breeze of auspicious
geniality which the Prime Minister brought into that anxious
and formal assemblage.

From the moment Mr. Lloyd George entered the Palace
of San Giorgio he became the central figure of the Conference.
" Your Prime Minister dominates the Conference," said a
foreigner to me. But he dominated it, we may fairly say,
not in any aggressive meaning of the term, but by virtue

The Inauguration 47

of his personal character, by the sense and sanity of his judg-
ments, and, perhaps above all, by that humour and good-
humour of his which served to hearten us all so long during
the war and helped towards our ultimate victory. I am as
free as any one could be from the prejudices, pro or contra,
of our home politics, but it may be said, without hyperbole,
that England, in the course of her history, has never
been more happily represented in international councils
than she has been since the war by the present Prime
Minister.

When the whole company was assembled, the Chair was taken
provisionally by Signer Facta, the Prime Minister of Italy, a
very pleasing gentleman, of short stature, courteous manners
and fair moustaches, gallantly ebouriffees. In this capacity he
addressed the following welcome to the deputations :

" I assume the temporary presidency of this Assembly,
and have the honour of welcoming you in the name of His
Majesty the King of Italy, in the name of the Government
and the Italian people, in the name of the Governments
represented on the Supreme Council and of Belgium, who
have invited you to meet here in Genoa to accomplish
together a great work of peace and economic reconstruction
in the interests of Europe and the whole world. We have
given the greatest care to the organization of this Confer-
ence, on which your countries and our country found their
legitimate hopes for overcoming the grave economic diffi-
culties of the present hour. Your work will be followed
in Italy with anxious sympathy by our whole nation.
Italian public opinion is fully convinced of the urgent need
of re-establishing in Europe a new economic equilibrium.
Italy has made the greatest efforts in the direction of recon-
struction since the end of the war ; nevertheless, she is
convinced that it is not possible to maintain the results
already secured, and still less to advance still further on
the path of her own economic recovery, unless a full and
lasting pacification of Europe is secured, and unless the
economic restoration of all the other nations of Europe is

48 The Genoa Conference

obtained. We have felt, and we feel, by the very funda-
mental characteristics of our own national economy perhaps
more keenly than other nations, the profound value of the
principle of economic unity of Europe and of the world ;
and, moreover, never before, since the war, has it been so
keenly made clear that the life of each single nation is
dependent on the life of all the others.

" Gentlemen, in the name of Genoa, which in history has
been associated with some of the greatest efforts accom-
plished for the organization of world trade, we hope that
the name of this city, where the present Conference is
taking place, will be a good augury for the results of our
labours. Italy is proud and happy that the Conference is
held in this country, and has full belief in its success, which
will depend more especially upon the goodwill of all the
nations here assembled, so that the name of this city will
go down in history connected with the name of this Con-
ference as one of its greatest glories.

" I will now read a message which has just been sent
to this Conference by His Majesty the King of Italy :

" ' On the day on which the International Conference
of Genoa begins its labours, I wish to send it a message
expressing my thoughts and hopes. May they express
my confidence in the final restoration of the spirit of
peace among the nations and the welcome which Italy
extends to all the countries whose representatives meet
to-day in this city of Genoa — Genoa, illustrious for its
glorious traditions, for the industry of its people and for
its great economic energies.'

" I will now read a telegram which has just come from
the President of the Council of Ministers of France, M.
Poincare" :

" ' Mr. President and dear Colleague, At this time,
when under your Presidency the International Conference
of Genoa is beginning its labours, I wish once more to
express to you all my regret at the fact that I cannot
leave Paris, and have not been able to accept the cordial

The Inauguration 49

invitation extended to me by the Italian Government.
M. Barthou, who replaces me at the head of the French
Delegation, will express to you the ardent wishes which
the Government of the Republic forms for the success
of the great work of economic and financial reconstruction
which the nations assembled at Genoa have undertaken
the severe task of bringing to a successful issue. The
great trials through which France has passed have never
made her lose sight of those permanent laws of European
solidarity. Just as keen is her legitimate desire not to
allow any attack to be made on the rights which are hers
in virtue of the Treaties. Equally keen is her wish to
collaborate with all her strength and with all her heart
for the restoration of unfortunate peoples. Not only
will she very willingly take part in all initiatives which
are taken to this effect, but her Delegation itself will
present to the Conference on all the more important
problems which will come before it positive and practical
proposals, such as are likely to favour the economic
revival of Europe, and restore general prosperity. Like
the Government of Italy, the Government of the Republic
ardently hopes that the Genoa Conference, by helping
to dissipate the feeling of distress which weighs on the
whole world, will succeed in making peace more pros-
perous and in preparing a more happy future for the
human family. Believe me, Mr. President and dear
Colleague, in the expression of my devoted sentiments,
RAYMOND POINCARE.'"

Signor Facta's speeches were at once translated into English
by Mrs. Agresti, wife of a distinguished Italian journalist,
daughter of Mr. W. M. Rossetti, and a niece of Dante Gabriel
Rossetti. She possessed a wonderful faculty of listening to a
speech in Italian, and at once reproducing its true gist in
English. She acted throughout the Conference as Anglo-
Italian interpreter, M. Camerlingh translating into French.

M. Facta then invited the Assembly to elect its President,
and Mr. Lloyd George at once arose to propose the

4

50 The Genoa Conference

Italian Prime Minister to that high position. He spoke
thus :

" Perhaps I may be permitted, before I submit to the
Assembly the name of a President whom I invite them
to elect, to thank the Italian Prime Minister for the
greeting which he has extended to us. It is a matter of
great pride to us to meet here under the auspices of the
great people to whom European civilization owes so
much throughout the ages. They have been amongst
the pioneers of civilization in this Continent. It is
therefore appropriate that they should take a leading
part in saving that civilization from being destroyed.
It is also a pleasure to meet in this illustrious city, which
from early days has taken such a part in the organization
of International trade and commerce and in the pro-
motion of the peaceable interchange of the products of
all the peoples of the world. I believe that in this very
building were witnessed some of the first efforts at bank-
ing throughout the wTorld. Having said so much, it is
now my privilege to propose for election to the Presidency
of this great Conference, upon which so much of the
hopes of the world depends, the name of Mr. Facta,
the Prime Minister of Italy ; not merely for the reason
that he represents this great people, but because his own
accomplishments are such that there is no better name
to be submitted. It is therefore with great pleasure
that I submit the name of Mr. Facta as the President of
the Conference."

The resolution was seconded by Monsieur Barthou, Chief
of the French Delegation. Some of his hearers caught a
vibration of the French temper vis-d-vis Russia in a certain
phrase in this brief speech, in which the French Minister
greeted Italy as " the home and cradle of those principles of
law which we all desire to serve." The motion was carried
unanimously, and Mr. Facta, having expressed his acknow-
ledgments of the honour, proceeded to deliver his inaugural
address. It is perhaps not necessary to reproduce these

Signor Factu 'holding paper in front), Prime Minister of Italy and President of the

Conference.

Croup at Genoa. Mr. Lloyd George with Mrs. and Miss Lloyd George. On the
extreme left Signor Faeta and on Mr. Lloyd George's left Signor Schanzer and Signor
Rossi.

[To fare }>fi'.ie '<<).

The Inauguration 51

speeches in extenso, especially as an official summary is
available. According to this, Mr. Facta said :

" The Conference is welcomed as an expression of the
spirit of solidarity with which all Europe should be
imbued— the Conference must act in the spirit of sincere
co-operation, striving to utilize to the utmost all the
resources of the nations assembled at Genoa. The
psychological, political, social, and economic effects of
the world war have completely destroyed pre-war financial
and economic conditions ; many European nations are
still in a state of economic disorder and even anarchy ;
some are threatened with disease and hunger.

" There are in the world some 3,000,000 unemployed
or under-employed persons. The fundamental reason
for this is lack of confidence, which must be restored if
the normal working of the economic machine is to be re-
established. To this end international co-operation is
necessary, and it is the spirit of co-operation and fraternity
which must guide the Conference.

" In this place the hatreds and resentments of war must
be forgotten. Here there are no longer friends and
enemies, victors and vanquished, but only members of
nations striving in common for the attainment of a lofty
ideal.

" The Conference agenda includes political, economic,
and financial questions, which are closely connected with
each other. Our goal is the restoration of such conditions
in Europe as will enable the peoples to live peacefully
side by side and co-ordinate the various national economic
systems, so seriously affected by the war. Europe is
to-day divided by economic barriers which are the source
of national isolation and mutual distrust. There are
countries, particularly Russia, which are outside the
general economic system of Europe. There are also
certain economic and financial problems which affect all
European countries. These questions should cause us
all to examine our consciences and reconsider our

4*

52 The Genoa Conference

military, financial, economic, transport and commercial
policies.

" Italy will at the Conference pursue the path which
she has followed since the war, that of peace and inter-
national collaboration. Italy will support at the Con-
ference the resolutions best calculated to secure these
things and to bring about an era in which disputes will be
settled not by violence, but by discussions. The cloud
in the Pacific has already disappeared as the result of the
Washington Conference.

" At Genoa we must work for the peace of Europe in
the same sincere spirit which inspired the Washington
gathering. The great principle which should dominate
the discussions is the great principle that the salvation
of the community of nations can only be achieved by
establishing a just accord between the independence,
autonomy, and sovereignty of individual States ; on the
one hand the respect which individual States must show,
on the other hand their reciprocal relations for the rights
of other States and of citizenship.

Signer Facta concluded by an appeal for equity, justice
and solidarity between peoples in conformity with the solemn
message just issued by the Pope, expressing impartial feeling
for all nations and hope for the establishment of harmony
among them.

Having thus spoken, Mr. Facta proceeded to make a declara-
tion of great significance in view of past events and those
about to take place :

" This Conference has been summoned on the basis of
the resolutions of the Cannes Conference. These resolu-
tions were notified to all the Powers who were invited to
attend. The simple fact that the invitation has been
accepted is evidence that those who have accepted the
invitation have therefore also accepted the principles
contained in the Cannes resolutions."
Then followed in turn the introductory speeches of the
heads of the more important delegations, Mr. Lloyd George

The Inauguration 53

rising first. Mr. Facta had read his address in a formal
manner, but with the British Prime Minister we were at once
in a different atmosphere. There was now no lack of that
actio which Cicero regarded as so essential to the art of oratory.
Mr. Lloyd George was in his best platform mood. He had
a complete command of himself, and in a few moments had
complete command of his audience. He spoke with great
energy, turning to right and left, now emphasizing a point
with clenched fist, now shaking an admonitory finger, and
with every modulation, through the whole gamut from
tears to laughter, of his wonderful instrument of a voice. To
the greater part of his audience English must have been an
unknown or imperfectly-known language. Yet the whole
assembly was held by the orator's musical tones, by his
eloquent gestures and the impression of sincerity and good
faith the entire speech conveyed. It was interesting to
notice, also, in this and the subsequent shorter speech, that
the thirty-four nations all seemed to appreciate in common
Mr. Lloyd George's recurring strokes of humour. No one
seemed to miss the sly reference to Christopher Columbus
and the absence of the Americans from the Conference. Mr.
Lloyd George said :

" I am glad to take this opportunity of associating the
British Delegation at the outset of our proceedings with
the clear and eloquent statement of the aims and principles
of the Conference which has fallen from the lips of the
Italian Prime Minister. This is the greatest gathering of
European nations which has ever been assembled in this
continent, and having regard to the magnitude of the
assembly, the character of its representation, the importance
of the topics we are here to discuss, the results of the Con-
ference will be far-reaching in their effects either for better
or for worse upon the destiny, not merely of Europe, but
of the whole world.

" We meet on equal terms, provided we accept equal
conditions. We are not here as allied and enemy States.
We are not here as belligerents and neutrals. We have

54 The Genoa Conference

not come together as Monarchists or Republicans or Soviet-
ists. We are assembled as the representatives of all the
nations and peoples of Europe to seek out in common the
best methods of restoring the shattered prosperity of this
continent, so that we may each build up in his own land,
each in his own way, a better condition of things for our
people than the world has yet enjoyed ; but, if we meet
on terms of equality, it must be because we accept equal
conditions. These conditions the inviting Powers laid
down at Cannes. They apply to all alike. They are the
conditions which have hitherto been accepted by all civilized
communities as the basis of international good faith. They
are in themselves honourable. They are essential to any
intercourse between nations. They do not derogate from
the complete sovereignty of States. We fully accept them
ourselves. They are the only conditions upon which we
can consent to deal with others. I will summarize them in
two or three sentences.

" The first is that when a country enters into

contractual obligations with another country or its

nationals for value received, that contract cannot be

repudiated whenever a country changes its Government

without returning the value.

" The second is that no country can wage war on the

institutions of another.
" The third is that one nation shall not engage in

aggressive operations against the territory of another.
"The fourth is that the nationals of one country shall

be entitled to impartial justice in the courts of another.

" If any people reject these elementary conditions of
civilized intercourse between nations, they cannot be
expected to be received into the comity of nations. These
conditions were laid down at Cannes. They were incor-
porated in the invitation to this Conference. They are the
fundamental basis of its proceedings, and all those who
accepted the invitation must be presumed to have accepted
conditions, and I have everv reason to believe that that

The Inauguration 55

is the view which every nation represented at this assembly
is prepared to adhere to in the letter and in the spirit.

" Mr. President, you have set out in forceful language
the object of this great Conference ; Europe undoubtedly
needs a common effort to restore the devastation wrought
by the most destructive war ever waged in this world.
That war came to an end over three years ago. Europe,
exhausted with its fury, with the loss of blood and treasure
which it involved, is staggering under the colossal burdens
of debt and reparation which it entailed. The pulse of
commerce is beating feebly and wildly ; in some lands an
artificial activity is stimulated either by demands for
repairing the ravages of war or by generations of thrift
by the frugal and industrious amongst the people, but
legitimate trade, commerce and industry are everywhere
disorganized and depressed. There is unemployment in
the West, there are famine and pestilence in the East ;
peoples of all races, of all classes, are suffering, some more
and some less, but all are suffering, and unless some common
effort of all the nations of Europe is made, and made
immediately, to restore European efficiency I can see
symptoms not merely that the suffering will continue, but
that it may even deepen into despair.

" What is the first need of Europe ? Peace — a real
peace. We propose to study currency — good. We propose
to examine the question of exchanges ; that is also good.
We propose to discuss transport and credit — that is all
good, but unless peace is established and good will amongst
the nations all these discussions will be of no avail. On
the other hand, if a real peace is the issue of this Conference,
all those things will be added unto you. But is there not
peace in Europe ? It is true that actual fighting has ceased,
but the snarling goes on, and as there are many dogs in
every country who imagine the louder they bark the
deeper the impression they make of their ferocity and
determination, Europe is deafened with this canine clamour.
It is undignified ; it is distracting ; it destroys confidence ;

56 The Genoa Conference

it rattles the nerves of a nerve-ruined continent, and we shall
only make a real contribution to the restoration of Europe
if at this Conference we can stop the snarling.

" Europe needs rest, quiet, tranquillity — that is, it needs
peace. If we act together in that same spirit we shall
succeed, not in the spirit of a greedy vigilance over selfish
interests, but with a common desire to do the best to restore
the world to its normal condition of health and vigour.
We shall do so if we measure the success of the Conference
by the good we achieve and not by the good we prevent.
We must not roll boulders in front of the plough. Let us
think more of what we can accomplish than of what we
can restrict.

" We have all of us one common restriction in the public
opinion of our own countries. The public opinion of one
country is concentrated, perhaps, more upon one aspect
of affairs and the public opinion of another upon a different
object. That undoubtedly creates difficulties. It is not
easy to reconcile these diverging opinions even when they
are not conflicting, but public opinion is not a rigid fact
like the Alps or the Apennines. It is amenable to guidance,
to direction, and to the appeal of reason and of conscience,
and I feel confident that in every way it will yield a good
deal to an appeal made to its mind and heart by the com-
mon statesmanship of Europe. It can be taught that the
good of another country is not necessarily an evil for its
own ; on the contrary, that what benefits all lands must
necessarily be the best for its own.

" The world is one economic unit. Economically it
is not even two hemispheres ; it is one round unbroken
sphere. For that reason I regret that the great American
Republic is not represented here. However, much that
has happened and is happening in Europe makes them
cautious of interfering in our affairs, but if we can set these
things right at this Conference I feel sure that America
will not merely come in, but come in gladly. A distinguished
citizen of this city once upon a time discovered America,

1>h°'° ''."] [/ttiisell, London.

The Right Hon. Sir Robert Home, G.H.K.. K.C ., M.P.. Chancellor of the Exchequer.

[To face j>aye 56.

The Inauguration 57

and as Genoa in the past discovered America to Europe
I am hopeful that Genoa once more will render another
immortal service to humanity by rediscovering Europe to
America.

" There are thirty-four nations represented at this table,
and the interest taken in the Conference by the world is
by no means exhausted by that representation. The
Press of practically the world is represented. They would
not be here if the great publics, which, according to their
genius, they either fortify and instruct or alarm and chasten
were not deeply concerned in our proceedings and anxious
as to the results. The world will follow our deliberations
with alternate hopes and fears. If we fail there will be a
sense of despair which will sweep over the whole world.
If we succeed a ray of confidence will illuminate the gloom
which is resting on the spirit of mankind. Europe is the
cradle of a great civilization, which during the last five
hundred years has spread across the globe ; that civiliza-
tion has been menaced with destruction by the horrors of
the last few years, but if we do our duty manfully and fear-
lessly we shall prove that this Conference, meeting as it
does in the sacred week of that civilization, is capable of
achieving its exalted purpose by establishing on a firm
basis peace and good will amongst men."
Then rose M. Barthou, the chief French Delegate, and we
had an opportunity of comparing two very different types of
oratory. The French Minister declaimed with much emphasis
from a manuscript he held in his left hand, while with his right
he gesticulated in the staccato manner characteristic of French
speech, whether elocutionary or colloquial. He said :

" I bring to this Conference, from which may result a
new orientation for the world, the considered views and the
loyal support of France. When Mr. Lloyd George, at the
Cannes Conference, took his noble initiative, France gave
her immediate adhesion, and if she did make a request for
an adjournment — an adjournment which has been usefully
employed — she only did so in the desire to attain, thanks to a

58 The Genoa Conference

more complete preparation, results in which she placed her
confidence and her hope.

" The world is tired of vain words and solemn declamations.
Such declamations are fruitless. The world is suffering
from ill-health and lack of security and stability. May a
methodical and efficacious action bring to it the equilibrium
which it requires ? We have come here to act. We are
not lookers-on ; we are collaborators ready to take our part
in the common labours and responsibilities. We are not,
indeed, blind to the difficulties and the obstacles of our task,
nor to the amount of time it must take, but pessimists are
impotent. Faith, and an active faith, can alone save the
world.

" Europe is strewn with ruins. It would no doubt be mad-
ness to believe that an enchanted castle could rise from those
ruins at one wave of the magic wand, but it would be mad-
ness, more disastrous and more monstrous, to sit on the
road with folded arms and do nothing because there was too
much to do.

" France has shown by her efforts that she understands the
necessity of, and that she knows the price of, action. She is
not animated with any feelings of national egoism and does
not pretend to exercise a hegemony. The war has cost her
too much for her not to hold war in horror. She is wholly
peace-loving, and it is not she who would have the criminal
aberration of disturbing the peace of the world.

" The Genoa Conference cannot be, and will not be, a court
of cassation before which existing Treaties will be called,
judged and revised, but on all financial and economic
questions, the solution of which means the restoration of
tottering Europe, free discussion is open to all. France
will not maintain a merely negative attitude. Her experts
have performed a considerable task, and there is no question
which has escaped their examination. We do not desire
that which appears inadmissible ; we desire that which we
believe to be just, necessary and possible. The com-
plexity of the questions precludes simplicity of formulae, and

The Inauguration 59

the sickness of Europe will not be cured by a panacea.
Europe — why not say the whole world ? — is a commercial
unity, all the members of which have been affected by the
war, even those which did not perish thereby, and it behoves
each nation, whatever be the political form of its govern-
ment, and provided it respects the common rights without
which there is no civilization, to aid in the reconstruction
and the success of all.

" The French Delegation will speak no word of hatred. It
does not wish anyone to suffer humiliation ; it will act in
the full light of day ; it has nothing to conceal of its ideas
and plans, and is animated with feelings of good will and
confidence, without which it would be useless, perhaps
dangerous, to set to work. Peace and work are the pro-
gramme and the watchword of France."
The speeches of the Delegates of Japan and Belgium were
commendably brief. Viscount Ishii, Japanese Ambassador
in Paris, emerging almost imperceptibly from the mass of
seated delegates around, spoke thus :

"Gentlemen, — The Conference which brings us together
to-day arouses throughout the whole world the greatest
hopes. Exhausted by the war, tired and irritated by the
evils which it has caused, the peoples of all nations, bellige-
rent and neutral, have their eyes fixed upon our delibera-
tions. They hope that the result of our labours will put an
end to the general state of discord, will close an era of dis-
crimination, of mistrust and of suspicion, and will inaugurate
an era of harmony, of confidence and of co-operation among
the nations.

" To attain this end it is indispensable to re-establish normal
relations in the sphere of economics, commerce and finance,
to remove the barriers which hinder the free interchange of
products and activities, and, finally, to realize that inter-
national solidarity which alone can lead to the return of
general prosperity. Although the geographical situation of
Japan renders her less directly sensible to the troubles in
Europe, she herself has suffered and still has to endure a

60 The Genoa Conference

serious economic crisis. She has suffered from the closing
of the European markets, from the uncertainty of economic
relations and from the instability of the exchanges. Our
country, which is animated by a sincere spirit of friendship
and international co-operation, wishes to live in peace
with all peoples, particularly with our neighbours. Her
policy is inspired solely by economic motives, by the desire
to contribute to the development of the natural resources
of the earth for the benefit of all, by a legitimate wish to
protect the rights of her subjects. The interests of Japan
are therefore in perfect harmony with those of other nations,
and it is with the hope of confident co-operation and active
collaboration that the Japanese Delegate is going to take
part in the work of this Conference, the importance of which
is inestimable and the results of which I hope will be of the
greatest benefit for the future development of the world."
M. Theunis, Prime Minister of Belgium, and First Delegate
for that country, rose from the opposite side of the hall and
had soon finished his say :

"Gentlemen, — After the eloquent speeches you have just
heard, will you permit the Belgian Delegation to say a few
words more to express in its turn its very great thanks to the
Italian Government for the cordial and hospitable reception
which has been accorded to them in this illustrious city ? I
desire equally to affirm the sincerity of the pledges we are
making for the success of this Conference. Belgium is a
nation jealous of its independence, but, above all, peaceful.
She has suffered cruelly from the war, and her active and
energetic population only demands to be allowed to work in
peace. Freedom of work and of the international exchanges
is all the more necessary to Belgium, as the density of her
population and her geographical situation have made her
one of the most active nerve-centres of Europe from the
industrial and commercial point of view. I will only
remind you that before the war Belgium occupied the fifth
position in the Nations of the World from the point of view
of special trade.

The Inauguration 61

" This will tell you how much we desire that remedies
may be found to put an end to the period of economic
oppression from which we are all suffering. The Italian
Government has been so kind as to allow the great Inter-
national Assize which is opening to-day to be held in its
country. It has chosen as the city of the Conference this
important commercial metropolis. The secular activity
of the city of Genoa and its marvellous development are
the best examples of the prosperity which the development
of international economic relations can bring to peoples."
It was then the turn of Dr. Wirth, the German Chancellor.
His was an eminently discreet utterance, consisting mainly of
harmless generalizations. It was also rather prolonged, and
by the time the audience had heard it translated into two other
languages, a slight sense of boredom had supervened. One
or two passages, however, for example that referring to the
economic solidarity of the world, were very ably conceived
and expressed.
According to the official summary :

Dr. Wirth said that the economic illness from which
the world was suffering might be far more dangerous than
physiological epidemics, and that co-operation and colla-
boration here were the essential parts of the cure. The
mere assembly of this Conference was a recognition of the
urgent necessity of this technical co-operation. He
insisted on the necessity of putting aside political aims
when discussing strictly economic problems. All the nations
of the earth formed an economic chain, and when one link
was broken then the chain was broken. The guiding
principle of the Conference must therefore be equal rights
of all peoples in our labours.

Dr. Wirth commented on the extremely difficult posi-
tion of the German Government in connection with their
own internal problems, but they were prepared to take the
risk of postponing dealing with their own internal affairs
in order to share in the united attempt to solve the problem?
of Europe. The economic prosperity of one country assisted

62 The Genoa Conference

the economic prosperity of all the others, and the pre-
dominant role in the Conference must be played by the
economic and financial experts who would guide Europe
back to the path of unrestricted trade and commerce.
Failure would render the burden of the present crisis insup-
portable, and would be the death-blow of reconstruction.
The problem of German economics was, as all the world recog-
nized, inseparably connected with the difficulties of which
the other nations had to complain. He hoped, in con-
clusion, that the business of the Conference would be
carried out with that determined optimism which should
accompany every great work.

Then came a long-expected moment, and the audience
uttered a little gasp of relief and curiosity when the President
called on M. Tchitcherin, member of the Central Executive
Pan-Russian Committee, People's Commissioner for Foreign
Affairs, President of the Russian Delegation. Arose then
a highly respectable, black-coated, spectacled gentleman,
extremely bourgeois in aspect, and rather suggestive of the
Wesleyan ministry. He spoke in French, but his speech was
translated into English. Neither M. Tchitcherin nor his
translator were clearly audible throughout the hall, so that
no one fully realized the amount of explosive material the
speech contained. He " took note " of the Cannes resolutions,
but it was his attempt to enlarge and interpret them in his
own fashion that caused the trouble. This oration, too, was
so long-winded that a careful and convenient summary may
be substituted for the literal report :

Associating himself especially with Signor Facta's and
Mr. Lloyd George's assurances that all the delegates were
there upon a footing of equality, M. Tchitcherin said that,
while remaining faithful to Communist principles, the
Bolshevists recognized that in the present historical period,
in which the old and new social order stand side by side,
economic co-operation between them was imperatively
necessary. They had not come to make propaganda, but
to open practical relations with the Governments and busi-

The Inauguration 63

ness men of all countries on a basis of reciprocity, equality
of rights, and entire recognition of the Bolshevist political
system. Russia was ready voluntarily to open her frontiers
for the creation of channels of international communica-
tions, and to offer for cultivation millions of acres of the
most fertile soil in the world. (He did not allude to the
famine.)

She was also ready to give forests and mining conces-
sions of infinite richness in accordance with a plan which
would be presented. This plan could be realized inasmuch
as the capital invested annually in it would be but a small
part of the sum spent on armies and navies in Europe and
America. The Bolshevists, therefore, took note of the prin-
ciples of the Cannes resolutions, adopted them in principle,
but reserved the right to put forward supplementary
amendments.

M. Tchitcherin wished to point out that the recent
decisions of the Bolshevist Government go beyond the
Cannes resolutions in regard to the legal guarantees de-
manded by the bourgeois States for their economic colla-
boration with Soviet Russia, but it must be firmly said
that all efforts economically to reconstruct the world must
be vain so long as the threat of new wars existed.

In this respect Russia was disposed to help to con-
solidate peace in so far as this might be possible under the
social and political order still existing in most countries.
The Russians would therefore propose a general limitation
of armaments and would support all tendencies to lighten
the burden of militarism on the condition that the limita-
tion should be applicable to the armies of all countries and
that the rules of war should forbid absolutely barbarous
methods like poison gases, aerial warfare, and especially
offences against civil populations. Russia was equally
ready to limit her own armaments on condition that there
should be entire reciprocity, and she were given guarantees
that were indispensable against every kind of attack and
interference in her domestic affairs.

64 The Genoa Conference

In attending the Conference and in greeting with
pleasure the British Prime Minister's proposal that similar
Conferences should be periodically convened, M. Tchitcherin
said he must point out the necessity of enlarging their
scope so that they might include representatives of every
people. Universal peace could only be the work of a uni-
versal congress meeting on a basis of the equality of all
peoples and the recognition of the right of every people to
self-determination. Moreover, it would be indispensable
that labour organizations should take part in these Con-
ferences, whose decisions would not be enforced by coercion
of any kind.

While accepting as a starting point the old international
agreements with suitable modifications, and being ready to
help to revise the Covenant of the League of Nations, the
Russian Government believes that a universal congress
should appoint technical commissions to work out the
economic reconstruction of the world. International rail-
way, fluvial and maritime routes must be created, the
immense riches of Siberia should be placed at the disposal
of the whole world, the gold reserves now accumulated in
some countries should be redistributed in pre-war propor-
tions by means of long-term loans, while the supplies of
coal and oil in the world should likewise be distributed.
These would be the main lines of the Russian proposals,
although as Communists they could be under no illusion as
to the possibility of removing the causes of war and economic
crises as long as the present social system lasts outside Russia.
Hitherto perfectly calm weather had prevailed in the
Conference, but when M. Tchitcherin sat down there arose
a squall of an ominous and dangerous violence. M. Barthou,
who had already had his turn, was immediately on his feet
again, in a mood of angry and emphatic protestation. He
took exception to three points which M. Tchitcherin had
sought to introduce into the Genoa agenda : the question
of a universal conference and of a series of conferences and
the subject of disarmament.

[Loniifier. Ltd., 23.\,

The Right Hon. Sir Laming Worthington-Evans, Bt., M.P.
Secretary of State for War.

treet, II".

[To face paye 64.

The Inauguration 65

M. Barthou said that although he did not wish to provoke
an incident, he desired still more to prevent possible mis-
understandings. At the beginning of the sitting Signor
Facta pointed out that the Conference was convened in
accordance with the Cannes resolutions and the presence
of the different delegations implied their acceptance of the
Cannes conditions. The French Delegation did not contest
the right of Russia or any other delegation to examine
and express its opinion on all subjects upon the agenda. If
M. Tchitcherin announced his intention of making proposals
upon financial, commercial, or transport questions, France
had no objection, but the leader of the Russian Delegation
had said in his speech that he would refer to questions
which were either passed by in silence or were deliberately
put aside at Cannes. Among those which were passed by
was the question of a so-called universal Conference, to
which M. Tchitcherin had referred. Nothing in the Cannes
resolution prepared us for such a Conference. The Russian
Delegates also suggested that the Conference of Genoa
would be the beginning of other Conferences which the
delegates here present would be morally bound to attend.
:' This, again, is not referred to in the Cannes resolutions,
and in the name of the French Delegation and of France
I must protest strongly against these two questions being
raised."

There was, besides, a third question which was deliberately
put aside at Cannes, and on which France could accept no
discussion. M. Tchitcherin had announced his intention
of introducing the question of disarmament. " This,"
added M. Barthou, " is not on the agenda, and I say simply
but clearly that when and if Russia wants to examine this
question she will be faced not only with the reserve of France,
but with her protest and absolute final and decisive refusal
to discuss it. Her attitude will be the same if in Committee
the President allows the problem to be raised at all."

M. Barthou pointed out that earlier in the afternoon
his speech had been very conciliatory, but there were times

5

66 The Genoa Conference

when one must say No. He was convinced that the Italian
Delegation would support him in insisting that no one
could escape from the Cannes resolution either directly or
indirectly.

M. Barthou sat down amid general applause, which was
rather a tribute to the energetic emphasis of his manner than
an expression of complete approval of what he said. It was
commonly admitted by observers afterwards that, dialectically,
M. Tchitcherin showed himself even more than a match for
the Frenchman in this bout of fencing. The reference to
M. Briand's rather unguarded remark at Washington was,
indeed, a masterly riposto.

The reader may be glad to hear what M. Tchitcherin said
at this critical juncture in full :

" Gentlemen, — In the French Memorandum of M.
Poincare, which we do not know of officially, but only
through the medium of the Press, it is said expressly that
the meaning of the principles included in the Cannes reso-
lutions is not very clear. Therefore we are entering the
same reservation, perhaps, on other points of the agenda.
We simply say that the scope of certain principles does not
appear very clear to us, and we request to be enlightened
in this respect. As to introducing into the debate questions
which are not mentioned in the agenda of the Genoa Con-
ference, we do not know this agenda officially, and I may
remark that some of the questions which are included in
the agenda of the Genoa Conference were not included in
the Cannes resolutions ; that you are here ready to study
questions which are outside the original limits of the Cannes
resolutions. We have an agenda which so far we consider
as provisional and not final for the Genoa Conference,
but as we have come here in a spirit of conciliation we are
ready to bow before the collective decision given by the
Conference about its own agenda.

"As to the idea of periodical Conferences, it was the
Prime Minister of Great Britain himself who introduced
this idea in one of his last speeches. I am only repeating

The Inauguration 67

what he himself declared. As to disarmament, I am not
aware of the official position taken in this respect by the
various Governments who have convened this Conference.
The point of view of France was known to us from state-
ments made by M. Briand at Washington when speaking
in the debate on the limitation of armaments. He said
that the cause for which disarmament — or rather limita-
tion of armaments, because at Washington it was limitation
of armaments that was discussed — the reason for which
armament could not be limited was the state of armament
in Russia. We, therefore, were led to suppose that if
Russia did consent to disarm the cause invoked by M.
Briand would ipso facto disappear. I may remark in this
respect that the question of disarmament has not been
excluded from the . present agenda. For us it is a capital
question, but I will here repeat what I said before. Having
come here in a spirit of conciliation we are ready to accept
the decision of the Conference if it decides that this question
shall not be included in this agenda."
The assembly was a little aghast at this sudden turn in the
proceedings. We seemed to be in sight of disaster. Was the
Conference destined to be wrecked even before it had cleared
the harbour ? Happily there was a sure and skilful hand
ready to take the wheel. This was the first of many occasions
on which Mr. Lloyd George was to save the Conference from
destruction. I do not wish to fall into hyperbole, but there
was, perhaps, no other statesman on this terraqueous globe
who could have done what the British Prime Minister now
did. It was the ultimate test of those happy qualities of
humour and good-humour which he has always brought to
bear upon these fateful world-palavers. It will be noticed
that Mr. Lloyd George made his points and administered his
" chaff " without wounding anybody's susceptibilities. I was
sitting behind M. Tchitcherin's broad and respectable back,
and could not see how he took the British Prime Minister's
banter, but those more favourably placed say that his face
was wreathed in appreciative smiles. If Mr. Lloyd George's

5*

68 The Genoa Conference

speech was extempore, as I have reason to believe, it was
surely a moral and intellectual achievement of the first order,
if one can use those heavy words of a performance so graceful
and lighthanded. The reader must supply from his imagina-
tion the expression and humorous gesture with which the
speech was delivered. It was pleasant to see the speaker
with both hands laid palm downwards on his coat in front,
leaning forward towards the formidable Bolshevist, and
administering this genial but paternal correction.

The British Prime Minister pointed out that their
previous efforts to secure a Conference of all the nations of
Europe, including Russia, had broken down because of the
difficulty of agreeing on the basis of such a Conference.
These failures were due to an attempt to raise issues which
were fatal to securing a conference between the nations, and
he sincerely hoped that that mistake would not be repeated
that day.

He thought that the three points in M. Tchitcherin's speech
which had been challenged by M. Barthou had been pre-
sented to the Conference more as general observations than
as conditions. Such observations were very useful but a
little dangerous. Peace conferences were apt to be explosive.
He appreciated the noble ideas of M. Tchitcherin and his
desire for a great international conference which should
discuss all these questions. Such a conference 'would,
however, be a long one, and he was getting old, and he felt
that he might expand the present agenda into something
universal, noble and excellent, no doubt, but very prolonged.
It was true that he had himself referred to periodic con-
ferences when he said that conferences were cheaper than
war, but the form such conferences should take was a
matter for discussion which, in view of the concrete agenda
before the Conference at Genoa, might well be postponed.
The United States of America might have something to say
to them, but they were not present to-day — though if
Genoa developed into a universal conference there would be
plenty of time for them to arrive.

The Inauguration 69

M. Tchitcherin would find in the Cannes agenda an
infinite variety of matters upon which he could challenge
M. Barthou and abuse M. Poincar6 and the speaker. He
would encourage him by suggesting that there was a vast
variety of most promising material for quarrelling with
everybody in the whole Conference if he only confined him-
self to that agenda and dropped his universal conference.

In passing, he was glad to note that M. Tchitcherin
approved of a speech which he had made in the House of
Commons — and which he thought himself was a good one
— dealing with disarmament.

He wished to speak quite frankly. " Unless the Genoa
Conference leads to disarmament it will be a failure, but
before you get disarmament you must have an under-
standing, you must have peace. You must know that the
nations are really prepared to march together. That is
the business of the Genoa Conference. This has got to be
established first.

" The Conference has already got as large a cargo as it
can carry. Every civilized country marked a load-line on
their merchant ships in order to show how heavily they
could be laden. M. Tchitcherin must not remove the load-
line. If he does he may sink the ship and perhaps find
himself among the drowned."

The ship was as heavily laden as the tonnage would
permit, and he asked M. Tchitcherin not to put anything
more on board. There was rough weather about, and an
overburdened ship did not make good progress in a heavy
sea.

" Let the Conference settle the things on the agenda
first," he proceeded. "They are big things. They are
immense things. The people are waiting for them ; they
are hungering for them. Do not let us destroy hopes by
asking for more than can possibly be managed in the course
of a single voyage. Let him (M. Tchitcherin) finish this
voyage first and go home with all the ship can carry from
here. We shall then welcome him in another voyage when

70 The Genoa Conference

we see what sort of a passenger he is. I have no doubt
that he will be agreeable, and I have no doubt that he will
work well.

" When Russia and all the other Powers have under-
stood each other and come home in a spirit of friendship,
then the road is clear to disarmament. As a matter of
fact, the League of Nations are considering the practical
disarmament proposals at the present moment, and M.
Barthou is not burking the question. Any further aspects
of the question can be referred to them to-day and, if
necessary, the Committee which is working on it can be
strengthened if it is not considered strong enough.

" M. Tchitcherin has accepted the principles of Cannes,
and he has accepted the agenda of Cannes. He says the
Cannes resolutions are not clear, and he quotes M. Poincare.
I do not agree with either him or M. Poincare. The Cannes
resolutions are as clear as the two best languages on earth
can make them — the French and the English.

" I am intervening as a man of peace. Let us get on
with the business ; let us stop raising infinite questions.
Let us stick to a very big agenda and get on."*
Solvuntur risu tdbulce. The threatening clouds dispersed
before the sunshine of humour and good-humour. M. Facta
rose at once to support Mr. Lloyd George. " Indeed, the
cargo this ship carries is a heavy one. It deals with vital
questions of immense importance, and if these questions are
brought into port it will be a matter of the greatest importance
to all the nations here represented." Vainly tried M. Barthou
to put to the Conference the definite question whether all
the delegates did or did not accept the Cannes conditions.
The President would not hear of it. "At the beginning of the
meeting," he said, " I read out a declaration, showing that the
basis for this Genoa Conference was the Cannes resolutions,
and that the very presence of the delegates here showed that
they had accepted those resolutions. No opposition was
raised to that statement. It is, therefore, agreed that these

* The Manchester Guardian, April I2th.

The Inauguration 71

resolutions of Cannes are the basis of the Conference, and
therefore I consider there is no call for any debate on the
subject." He then announced the formation of the four
Commissions, and proposed the election of Baron Romano
Avezzana as Secretary-General of the Conference.

So ended at ten minutes past seven the inaugural ceremony,
and the Conference was ready to begin its practical work.

CHAPTER IV

THE ORGANIZATION

THE general organization of the Conference was in three
divisions — the Plenary Conference, the Commissions
and the Sub-Commissions. The Sub-Commissions reported
to the full commission, and the full commission to the Con-
ference in plenary session. There were in all three meetings
of the Plenary Conference, that of the inaugural ceremony,
that which adopted the reports of the Financial and Transport
Commissions, and the final sitting, which adopted the Economic
and Political Reports and wound up the Conference. It is
not necessary to give the entire personnel of the Conference,
including all the secretaries and interpreters and typewriters
on the Italian and other staffs. The large number of young
women of various nationalities who acted in these departments
of practical work, the " amenities," as someone called them,
of the Conference, added greatly to the life and cheerfulness
of the scene. Despite the really hard work and long hours
they had a delightful change, if not an actual holiday, in
this glorious city.

The General Secretariat of the Conference, established at
the Palazzo Reale, was conducted by Italy, the inviting
Power. The administrative duties were extremely heavy,
and it is not surprising that at the outset a good deal of con-
fusion prevailed. But Genoa displays a motto in one of her
halls, which runs, " Ubi ordo defficit, nulla virtus sumcit,"
and long before the Conference ended the machinery in the
many ceremonial, publicity and other bureaux in the great
Palace in the Via Balbi were running sweetly and smoothly.
It is impossible to give the tribute individually to all who

72

The Organization 73

deserved it, but mention must be made honoris causa of the
Secretary-General, Baron Camillo Romano Avezzana, the
head of the Commissions Department, Marchese Carlo
Durazzo, and the Director of the Press Bureau, Comm.
Amedeo Giannini.

It is even more impracticable to give the names of all the
delegates, experts, secretaries and assistants who composed
the great army that invaded Genoa. But from the official
records the main details may be gathered and reproduced.
Beginning, therefore, with the Plenary Session, the States
which had a right to five delegates were as follows :

Belgium : M. Theunis, M. Jaspar, M. Delacroix, M. Lepreux.

France : M. Louis Barthou, M. Camille Barrere, M. Colrat,
M. Jacques Seydoux, M. Ernest Picard.

Japan : Baron Hayashi, Viscount Ishii, M. Kengo Mori,
M. Moroi, M. Sato.

British Empire : The Rt. Hon. David Lloyd George, The
Most Hon. The Marquess Curzon of Kedleston, The Rt. Hon. Sir
Robert Home, The Rt. Hon. Sir Laming Worthington-Evans,
Sir Philip Lloyd-Greame. Canada : Sir Charles Blair-Gordon,
Professor E. Montpetit. Australia : The Rt. Hon. Sir J.
Cook. South Africa : The Hon. Sir Edgar Walton. India :
Mr. Dadiba Merwanjee Dalai.

Italy : S. E. 1' On. Aw. Luigi Facta, S. E. 1' On. Dott. Carlo
Schanzer, S. E. 1' On. Dott. Camillo Peano, S. E. 1' On. Conte
Avv. Teofilo Rossi, S. E. 1' On. Avv. Giovanni Battista
Bertone.

Germany : Dr. Wirth, Dr. Rathenau, Dr. Hermes, M.
Schmidt, Dr. Havenstein.

Russia : M. Georges Tchitcherin, M. Leonide Krassine,
M. Maxime Litvinoff, M. Adolphe Joffe, M. Christian Rakowski.

The States entitled to two delegates were these :

Albania : S. E. Mehdi Bey Fracheri, Dr. B. Blinishti.
Austria : S. E. Jean Schober, S. E. Alfred Gruenberger.

74 The Genoa Conference

Bulgaria : S. E. Alexandra Stambulisky, S. E. Marko
Tourlakoff.

Czechoslovakia : Dr. Edouard Benes, Dr. Stepan Osusky.

Denmark : M. H. A. Bernhoft, M. Emil Gluckstadt.

Esthonia : S. E. Georges Westel, S. E. Otto Strandman.

Finland : M. J. H. Vennola, M. Ch. Enckell.

Greece : S. E. D. Gounaris, S. E. L. K. Roufos, M. J. Mallah.

Holland : Jonkheer Ch. J. M. Ruys de Beerenbrouck,
Jonkheer H. A. van Karnebeek.

Hungary : S. E. Comte E. Bethlen, S. E. M. J. Teleszky.

Iceland : M. Sveinn Bjornsson.

Latvia : M. Z. A. Meierowics, M. R. Kalnings.

Lithuania : M. E. Galvanauskas, M. T. Norus-Narusevicius.

Luxemburg : M. Emile Reuter.

Norway : M. Johan Ludwig Mowinckel, M. Johannes
Irgens.

Poland : M. Konstanty Skirmunt, M. Gabrjel Narutowicz.

Portugal : S. E. Manuel Teixeira Gomes, S. E. Victorino
Maximo de Carvalho Guimaraes.

Rumania : S. E. Ion I. C. Bratianu, S. E. Costantin
Diamandy.

Serb-Croat-Slovene Kingdom : S. E. Nikola Pachitch, S. E.
Momtchilo Nintchitch.

Spain : S. E. el Sefior Don Venceslao Ramirez de Villa
Urrutia, S. E. el Sefior Don Pablo de Garnica, S. E. el Senor
Don Filipe Rodes.

Sweden : S. E. M. Branting, Dr. Trygger.

Switzerland : M. Giuseppe Motta, M. Edmond Schulthess.

The practical work of the Conference was distributed over
four commissions, on each of which all the delegations were
represented directly, the convening Powers, i.e., Great Britain,
Italy, France, Belgium and Japan, with Germany and Russia,
having two members, and the smaller Powers one each. The
first, briefly known as the Political, or Russian, was entrusted
with the consideration of the first three of the six paragraphs
constituting the general agenda in the first Cannes resolution.
The second undertook the financial questions, the third the

The Organization 75

economic and the fourth transport. But for the purposes
of actual work a further sub-division was necessary. The
main commissions might consist of two hundred to two
hundred and fifty delegates and experts, and were consequently
quite unadapted for effective and fruitful discussion.

Each commission, therefore, appointed a sub-commission
charged with the duty of laying out the enormous work
which came within its purview. The composition of these
sub-commissions provoked some discussion. It was obvious
that each of the small States could not be separately repre-
sented. The arrangement was made, therefore, that each of
the five convening Powers should have one representative,
and also Germany and Russia one each, while the rest of the
Powers were grouped under a common representation.

The First, or Political Commission, was presided over by
the President of the Conference himself, the Prime Minister
of Italy, Signer Facta, and all the chief delegates were on its
membership. The British membership, as recorded officially,
was :

Delegates : Mr. Lloyd George, Lord Curzon (absent).

Substitute Delegates : Lord Birkenhead, Sir Philip Lloyd-
Greame.

Experts : Sir Sydney Chapman, Sir Edward Grigg, Mr. J. D.
Gregory and Mr. Peters.

Secretary : Sir Maurice Hankey.

From this Commission was formed the famous Political
Sub-Commission, which was the scene of the most animated
and critical debates in the Conference, those on the much-
controverted Russian problem. It consisted of one repre-
sentative from each of the convening Powers and Russia and
Germany,* the remaining Powers being represented by
Switzerland, Poland, Rumania and Sweden, each with one
representative. The British delegate on this First Sub-
Commission was Mr. Lloyd George himself, his assistants being

* After the conclusion of the Russo-German agreement, which caused such
a sensation during the Conference, Germany no longer attended the meetings
of the sub-commission when Russian questions within the scope of that
agreement were under consideration.

76 The Genoa Conference

nearly the same as those of the main commission. The
President of this historic sub-commission was Signer Schanzer,
the liberal-minded Italian Foreign Secretary. M. Barthou
represented France, and the Russian delegate was M.
Tchitcherin, with MM. Krassine and Litvinoff as experts.

Incidentally the election of Rumania on this sub-commission
occasioned a little " incident," the President of the Russian
Delegation entering a protest against the election of that
country on the ground that it was in actual occupation of
Bessarabia, which he declared to be Russian territory. At
the first meeting of the same commission the Russian Delega-
tion also protested against the " abnormal character " of the
presence of Japan on a commission whose object was to
establish on a solid basis the economic relations between
Russia and other countries. The ground of this protest was
that Japanese troops were in occupation of a part of the
territory of the Republic, allied to Russia, in the Extreme
Orient. The Russian Delegates, having satisfied their own
consciences and public opinion at home by these formal pro-
testations, nothing further occurred, and nobody was " a
penny the worse."

These were not all the protests. M. Barthou (France)
and M. Theunis (Belgium) were also strongly of opinion that
Russia and Germany should not be members of this sub-
commission. Once more the Conference, or its character as
an assemblage of Powers on equal terms, was saved by the
persuasive powers of the British Prime Minister. He re-
marked that, if Germany and Russia were excluded, the
Conference might as well not have met at all, and that it was
an impracticable policy to keep two hundred million people
" waiting on the doorstep." These were the first symptoms
of a radical divergence in point de vue between the British and
French Delegations and Governments.

Sir Robert Home, British Chancellor of the Exchequer,
presided over the Second, or Financial, Commission. The
other delegate, who took Sir Robert's place when he went
home on Budget business, was the British War Minister, Sir

The Organization 77

Laming Worthington-Evans, the British " substitute " dele-
gates being Sir Basil Blackett and Sir Charles Addis.

The sub-commission formed from this main Commission
consisted as usual of the Seven Powers, but the group repre-
sentatives on this occasion were drawn from Holland, Denmark,
Czecho-Slovakia, Finland and Rumania, Sir Robert Home
once more presiding over the whole. Associated with this
sub-commission, which dealt specifically with currency, were two
other sub-commissions, dealing respectively with credits and
exchange, Sir Laming Worthington-Evans and Sir Robert
Home being respectively chairmen. But this commission
furnished itself also with an extremely powerful committee of
experts, including Sir Basil Blackett, Professor Cassel, Dr.
Havenstein, Dr. Vissering, M. Avenol, Sir Henry Strackosch,
M. Dubois, Comm. Bianchini and the Hon. R. H. Brand,
all men of world-wide reputation and practical business ex-
perience, to whom we shall have to make further reference
in subsequent pages.

The Third or Economic Commission, whose President was
M. Colrat, the French delegate, similarly formed two sub-
commissions. Likewise the Transport, a Fourth Commission,
presided over by M. Theunis, Belgian Prime Minister, had
sub-commissions on Organization, Railways and Waterways.

A good deal of information about the inner economy of the
Conference may be derived from the Rules of Procedure,
which were marked by an admirable brevity and simplicity.
They were set forth in twelve articles :

ARTICLE I

DELEGATES

The International Economic Conference convened at the
invitation of the Italian Government on behalf of the Powers
represented at the Cannes Conference, consists of plenipo-
tentiary delegates appointed by the States invited to attend.

The number of these delegates is five for the Powers which
convened the Conference, Germany and Russia, and two for
the remaining Powers.

78 The Genoa Conference

Each delegation will have one vote only.
Written notice of the appointment of delegates must be
sent to the Italian Government or to the President of the

Conference.

ARTICLE II

DEPUTIES

Each State represented at the Conference is entitled to
appoint deputies of the same number as its plenipotentiary

delegates.

ARTICLE III

TECHNICAL ADVISERS

The plenipotentiary delegates of each State may be accom-
panied by technical advisers. Written notice of the appoint-
ment of these advisers must be sent to the Italian Government
or to the Secretary-General of the Conference.

ARTICLE IV

CREDENTIALS

All plenipotentiary delegates are requested to hand in their
credentials at the earliest possible moment to the Secretary-
General's office.

A committee for the verification of credentials, consisting
of one delegate from each of the Powers convening the Con-
ference, will at once proceed to verify the credentials of the

delegates.

ARTICLE V

ORDER OF PRECEDENCE

Votes will be cast according to the Italian alphabetical order
of the names of the Powers,

ARTICLE VI

BUREAU OF THE CONFERENCE

The appointment of the regular President will be made at
the first meeting.

In the absence of the President, the duties of his office will
be performed by the head of the delegation to which the
President belongs.

The Organization 79

The Prime Minister of Italy will provisionally act as President
of the Conference until the regular President has been appointed.

The control of the debates of the Conference will be exercised
by the President.

The President is empowered by the Assembly to take any
measures which he may consider necessary for the conduct
of the debates.

The President, together with presidents of the Commissions,
will form the bureau entrusted with the duty of drawing up
the agenda and with the consideration of all questions of
procedure.

ARTICLE VII

THE SECRETARIAT

The Secretariat will be directed by an Italian Secretary-
General, assisted by the chiefs of the secretariats of the dele-
gations of the Powers convening the Conference.

The Secretariat is placed under the control and authority
of the President.

The secretaries designated by the delegations to follow the
work of the Conference and to collaborate in drafting the
minutes will also be attached to the Secretariat.

The Secretariat is especially entrusted with the duty of
receiving communications and translating the documents,
reports and resolutions bearing on the labours of the Con-
ference, translating the speeches delivered during the meetings,
drafting and communicating the minutes of the meetings, and,
generally, of performing any tasks which the Conference may
see fit to assign to it.

Members of the Conference will always have access to the
records.

ARTICLE VIII

PUBLICITY OF PROCEEDINGS

The publicity of the proceedings will be provided for by
means of official communiques drawn up by the Secretariat,
with the approval of the President of the Conference. The
plenary meetings only will be public, except when otherwise

so The Genoa Conference

notified. Members of the public will be admitted on produc-
tion of cards issued by the Secretariat-General.

ARTICLE IX

COMMISSIONS

Commissions will be formed to consider the questions on
the agenda.

Each delegation may appoint one delegate to sit on each
of the commissions ; the Powers which have five delegates
at the Conference will appoint two delegates each for this
purpose.

The same delegate may sit on several commissions.

All the commissions will be empowered to divide themselves
into sub-commissions.

ARTICLE X

OFFICIAL LANGUAGES

The official languages of the Conference are Italian, French
and English.

Speeches delivered in one of these three languages will be
translated into the other two by an interpreter attached to
the Secretariat.

Any delegate speaking in another language will have to make
provision for the translation of his speech into Italian, French or
English.

All documents, proposals and reports communicated to
members of the Conference by the President or by the Secre-
tariat will have to be drawn up in Italian, French and English.

Any delegate will be entitled to distribute documents
written in other languages than Italian, French or English,
but the Secretariat will not be required to provide for their
translation and printing.

ARTICLE XI

DOCUMENTS, PROPOSALS, ETC.
I

Documents, proposals, etc., must be communicated in
writing to the President, who will cause copies to be distributed
to the delegates*

The French Delegates at Genoa. M. Barthou to left, M. Barrere to right of
the two central figures.

Krassin
Tchitcherin

Russian Delegation.

[To face page SO.

The Organization 81

Documents and proposals can only be submitted by or on
behalf of a plenipotentiary delegate.

ii

Except in the case of proposals relating to questions on the
agenda, or which arise out of the debates, delegates who
desire to submit proposals must hand them in twenty-four
hours in advance in order to facilitate their discussion.

Exception may, however, be made to this rule in the case of
amendments or secondary questions.

in

Petitions, memoranda, and documents addressed to the
Conference and emanating from any other person than a
plenipotentiary delegate must be handed in to the Secretariat,
which will communicate them to the President's bureau.

All these papers will be preserved in the records of the

Conference.

ARTICLE XII

MINUTES OF THE MEETINGS

The provisional minutes of the meetings, drawn up by the
Secretariat, will be distributed to the delegations as early as
possible.

The minutes, with any amendments and corrections which
the delegates may make, must be returned to the Secretary-
General's office within twenty-four hours after distribution.

In order to expedite the proceedings, this distribution will
be considered as equivalent to the reading of the minutes at
the opening of each meeting.

If no correction is asked for by the plenipotentiary delegates
the text, as distributed, will be considered as having been
approved and will be placed in the records.

If a correction affecting the substance of a report is asked
for, the President will read the proposed modification at the
opening of the next meeting.

Such, then, was the machinery which had to deal with a
mass of raw material as intractable as any conference was
ever expected to subdue.

6

CHAPTER V

GETTING UNDER WEIGH

problem of making a start on this immense field
JL would have been impracticable but for a resource
which by the happiest foresight had been placed at the dis-
posal of the Conference in advance. A few weeks before the
opening a committee of Allied experts had met in London
and performed the first stubbing and delving on the ground,
their labours being embodied in a long report dealing success-
ively with the four main subjects before the Commission —
Russia, Finance, Economics and Transport.

This Report never had the character of an official document.
It was also one-sided in its presentation of the Russian problem
and represented approximately the maximum of the Allied
claims against that country. When the Russian delegation
at Genoa proceeded in the earlier days of the Conference to
reply to these experts they accordingly pitched their demands
as high as possible. But the Report served its purpose
excellently. When the Commission entered upon their task
they found the land ready for the finer operations of husbandry,
and much time and labour was thus saved. The reader
might do worse than study this document, which affords a
convenient conspectus of the problems facing the civilized
world at the conclusion of the Great War.*

It was a simple matter to take the scissors and divide the
Report into four parts dealing with Russia, Finance, Economics
and Transport, and thus provide each Commission and Sub-
Commission with a convenient survey of the ground they
had to cover.

* See Appendix III.
82

Getting under Weigh 88

The main interest in these early days was naturally concen-
trated on the First or Russian Commission. It was generally
realized that no economic or financial world-construction
was possible from which Soviet Russia, with her incalculable
resources and vast populations, should be excluded. It was
scarcely less essential that Germany should also be brought
into a more normal condition. But in these first days, though
the other commissions were setting to work on their own tasks,
it was Russia that absorbed most of the limelight.

Then rose another difficulty. To the Russians and perhaps
to other members of the sub-commission this Report was
quite unfamiliar. It was felt that little progress would be made
if it was submitted to the sub-commission of eleven persons
without previous consideration. We soon heard of informal
discussions proceeding at the British Prime Minister's residence,
the Villa de Albertis. These gatherings consisted of Mr.
Lloyd George, Sir Philip Lloyd-Greame and other British
representatives, MM. Barthou and Seydoux (France), M.
Schanzer (Italy), MM. Theunis and Jaspar (Belgium) and
MM. Tchitcherin, Litvinoff and Krassine (Russia), each
deputation bringing its own experts.

The object of the meetings, we were told, was to clear up
certain points with regard to Russia and then to report to the
sub-commission and renew the discussions there. The con-
versations at the Villa de Albertis were, of course, conducted
behind closed doors, but a chink was opened in the form of a
communique^ duly presented twice a day to British and
American journalists at their meetings in the grand old build-
ings of the University.

Such private symposia as these at the Villa always play a
great part in international conferences. People will never
talk unconstrainedly in formal committees or commissions, to
which these informal conversations form, therefore, an almost
essential preliminary. Great care, however, should always be
taken to keep interested but excluded members in continuous
touch with what goes on beyond those doors. The Germans,
as we shall see, complained that they knew nothing about

6*

84 The Genoa Conference

the debates in the Villa de Albertis in which they were specially
interested. But see on this point the last letter to the
Germans in Chapter VII.

Now ensued a period of waiting during which rumours
accumulated as thick as leaves in Vallombrosa. Most of these
were no sooner started than they were discredited. But many,
at least in the earlier stages of events, were solemnly cabled to
various home-countries. The newspapers thereof arriving
some two days later, we read them solemnly set out long after
they had ceased at Genoa even to amuse. Some of them were
of a more serious character. It was announced, for example,
that Britain was proposing a new " Pact," a military holiday,
during which no Power was to attack the territory of another
for a certain number of years under pain of military reprisals.
It was quite certain to most persons who understood the
principles of British policy that no such proposal would be
made. The British were against that system of sanctions
which unfortunately found its way into the covenant of the
League of Nations. Sanctions, that is, military compulsion
enforcing an agreement, belonged to an order of ideas from
which Britain's object was to wean the world. Sanctions
implied groups and counter-groups, which was contrary to
British policy and the whole spirit and purpose of the Genoa
Conference. The only penal support Britain would consent
to place behind any such agreement was the moral and
economic isolation, the general " bad time " which any
offending Power might be expected to incur.

It was inevitable that the questions of disarmament
and reparations should keep emerging despite the taboo of
the Cannes agenda. On disarmament, however, the British
position was clear and had been quite clearly denned by
Mr. Lloyd George in the Palazzo di San Giorgio. First came
peace, then disarmament. That was the logical order. If
Genoa succeeded in establishing a well-grounded peace among
the European Powers, as \Yashington had^established it in the
Pacific, then the details of a scheme of common disarmament
could be discussed and settled at a future gathering of the

Getting under Weigh 85

Powers. This was the adequate reply to the criticism that
nothing important could come out of the Genoa Conference
if such a subject as disarmament were excluded. It should
also be noticed that by the exclusion of the disarmament
question only definite proposals and projects on that subject
were meant. For example, it was allowed, even by the French,
that disarmament had a considerable bearing upon the
question of balancing national budgets, and that it would be
unreasonable to rule out even an allusion to the subject in
that connection.

One quite unfounded piece of gossip got a long start and
duly appeared in French papers, whence it was copied else-
where. This was that Mr. Lloyd George had fixed a time-
limit for the Russians at n o'clock on Saturday, April I5th,
by which hour a final reply was to be given on the proposals
contained in the report of the London experts. The absurdity
of this will be understood when it is recalled that the Russians
had set eyes on that highly complicated document only two
or three days before and could scarcely have read it through
with any fair comprehension before the day mentioned. The
truth was that at that very hour the Bolshevik delegates were
entering the Villa de Albertis for further deliberations with the
Prime Minister and his colleagues.

All this time we were speculating about the proceedings in
the postscaenia at the Villa de Albertis. It was understood
that financial questions were mainly at issue regarding three
classes of Russian obligation — the pre-war debt, the war debt
and the restitution of private property. The question of the
Mixed Tribunals, the "Capitulations" as they were called,
had not, we understood, been approached. As a matter of
fact, the propositions contained in the document appeared
extremely drastic and it was scarcely expected that the
Russian delegates, who were responsible to some sort of public
opinion at home, however dispersed and inarticulate it might
be, would be able to swallow the Report whole. Some com-
promise seemed probable. Yet it was pointed out that the
reforms demanded of Russia must necessarily be far-reaching

86 The Genoa Conference

if the purpose of the Conference were to be reached. Foreign
capital would never flow in to irrigate Russian productive indus-
try unless social and political conditions were such as to inspire
confidence. A year previously Britain had made an arrangement
practically recognizing de facto the Soviet Government, but no
movement of trade had ensued in the absence of internal con-
ditions in Russia guaranteeing personal and financial security.

Meanwhile some impatience over the doings or non-doings
at the Villa became manifest. It is true we had encouraging
messages, including a very characteristic one from Mr. Lloyd
George, couched in the favourite form of a parable : " We are
building a bridge across the stream," spake the unseen and
oracular voice. " We have driven in some piles. We are
now in the deepest part of the current and are driving them
into the mud at the bottom. Although the bridge is not yet
above the water, the piles are firmly fixed, but we are still
hammering at them."

This was a picturesque similitude, but it scarcely satisfied
the delegates of the Powers who had been chosen to discuss
these Russian problems in the First Sub-Commission, but were
not admitted to the informal conversaziones at the Villa.
These gentlemen began to get restive and to wonder whether
their own functions were not going to be restricted to the
registration of a set of cut-and-dried decisions. The question
was asked who had authorized the transference of the venue
of these discussions from the Palazzo Reale, where the Sub-
Commission on Russia ought to be meeting, to the pleasant
villa outside Genoa. I may add here that the impatience of
the smaller States was not made longer and stronger by the
fact that, unlike the convening Powers, they were paying their
own expenses at Genoa.

Many during this period were the informal conferences
arranged between the chiefs of delegations on the one hand
and groups of journalists or the "Presse mondiale " on the other.

The most popular, I think, of these were the evening meetings
at the Hotel de Genes with the Russian deputation, especially
when that singularly attractive person, M. Rakowski, " Presi-

Getting under Weigh 87

dent of the Council of People's Commissioners and People's
Commissioner for the Foreign Affairs of the Socialist Soviet
Republic of the Ukraine, Member of the Central Pan-Russian
Committee," sometimes known as the Dictator of the Ukraine,
took up the parable of Russian propaganda in lucid and
deliberate French. It is not surprising that Sir Robert
Home, in the Financial Sub-Commission, should have com-
plimented M. Rakowski on his " admirable parliamentary
manner." His manner and diction were, indeed, perfect,
and he gave an impression of imperturbable strength and
confidence, as well as of intellectual acumen and a pronounced
sense of humour. He no whit resembled the Bolshevist as
pictured in many a British and French imagination.

M. Rakowski set himself to the task of correcting some
Western misconceptions. We had most of us imagined
that the social revolution had been the cause of famine and
ruin in Russia. We had now to learn, or to be informed, that
these distresses were far more the result of the revolutionary
wars forced on the Soviet Governments through the help
given by the Allies to those anti-Bolshevik leaders, Generals
Denikin, Koltchak and Yudenitch. These wars, forced upon
the new Russia, had caused occupations by enemy troops
of vast territories and crushing requisitions on the people, and
had compelled the upkeep of an army of four or five million
men. In reply or counterclaim to the Allied estimates of
Russian obligations, M. Rakowski and his friends, as we shall
see, presented a bill so enormous that even if Russia's cre-
ditors had cancelled all their claims, they would still have
had a big adverse balance against them. M. Rakowski
probably took a certain pleasure in these quick and reasoned
corrections of public opinion. I think he must specially have
enjoyed his reference in the Financial Sub-Commission to
" the admirable order established in Russian finances," a
point he afterwards enforced in writing.

And so in rumours and counter-rumours and instructive
confabulation we spent the time until Monday, April iyth,
when a bolt fell without any warning from the blue Italian sky

CHAPTER VI

STORMY WEATHER

IT was during the afternoon of April zyth that the first
rumour, in this case only too well founded, spread rapidly
abroad, that while most of us had been living amid infinite
talk and tattle, while beards had been wagging and Tapers
and Tadpoles busily plying their trade, the Russians and
Germans had produced something which might fairly be
called " concrete " and had presented the astonished Conference
with a fait accompli in the form of a treaty sealed and signed
on the preceding day, Sunday the i6th. It was indeed not
long before the terms of the agreement were issued by the
parties to it, together with a brief communique explaining its
nature. In few words Germany recognized the Bolshevist
Government. Debts were reciprocally cancelled and Russia's
claims for reparations from Germany under the Treaty of
Versailles were waived : as also were German claims to all
private property nationalized by the Bolshevists unless the
Bolshevists should subsequently admit similar claims on the
part of other States, in which case Germany was to enjoy
most-favoured-nation treatment.

The terms of this famous, perhaps epoch-marking, Treaty
of Rapallo were these :

The German Government, represented by Heir Rath-
enau, and the Government of the Soviet Republic,
represented by the People's Commissar Tchitcherin,
have agreed on the following treaty :

Clause i. — The two Governments agree that all ques-
tions resulting from the state of war between Germany

Stormy Weather 89

and Russia shall be settled between the Reich and the
Federal Republic of Soviets in the following manner :

Paragraph A. — The Reich and the Republic of Soviets
mutually renounce repayment for their war expenses and
for damages arising out of the war, that is to say, damages
caused to them and their nationals in the zone of war,
operations by military measures, including all requisitions
effected in a hostile country. They renounce in the same
way repayment for civil damages inflicted on civilians,
that is to say, damages caused to the nationals of the
two countries by exceptional measures or by violent
measures taken by an authority of the State of either side.
Paragraph B. — All questions of public or private law
resulting from the state of war, including the question
of the merchant ships acquired by one or the other side
during the war, shall be settled on a principle of reciprocity.
Paragraph C. — Germany and Russia mutually renounce
repayment of the expenses caused by prisoners of war.
In the same way as the Reich renounces repayment of
the expenses caused by the internment of soldiers of the
Russian Army, the Russian Government renounces re-
payment of the sums Germany has derived from the
sale of Russian Army material transported into
Germany.

Clause 2. — Germany renounces all claims resulting
from the enforcement of the laws and measures of the
Soviet Republic as it has affected German nationals or
their private rights or the rights of the German Reich
itself, as well as claims resulting from measures taken
by the Soviet Republic or its authorities in any other
way against subjects of the German Reich or their private
rights, provided that the Soviet Republic shall not satisfy
similar claims made by any third State.

Clause 3. — Consular and diplomatic relations between
the Reich and the Federal Republic of Soviets shall be re-
sumed immediately. The admission of consuls to both
countries shall be arranged by special agreement.

oo The Genoa Conference

Clause 4. — Both Governments agree furthermore that
the rights of the nationals of either of the two parties on
the other's territory as well as the regulation of commercial
relations shall be based on the most-favoured-nation
principle. This principle does not include rights and
facilities granted by the Soviet Government to another
Soviet State or to any State that formerly formed part
of the Russian Empire.

Clause 5. — The two Governments undertake to give
each other mutual assistance for the alleviation of their
economic difficulties in the most benevolent spirit. In
the event of a general settlement of this question on an
international basis they undertake to have a preliminary
exchange of views. The German Government declares
itself ready to facilitate as far as is possible the conclusion
and the execution of economic contracts between private
enterprises in the two countries.

Clause 6. — Clause i, paragraph B, and Clause 4 of this
agreement will come into force after the ratification of
this document. The other clauses will come into force
immediately.

Done in duplicate at Rapallo, April i6th, 1922 —

TCHITCHERIN, RATHENAU.

The repercussions of this news were formidable. What
struck most people was the almost insolent audacity of the
transaction. It might be true, as M. Rakowsky said, that
the negotiations of the treaty had been proceeding since the
month of January. But even so why should these early
days of a Conference, whose whole spirit and purpose was
opposed to agreements of a partial and sectional kind,
have been chosen as the date of the conclusion and
announcement of such an act ? Was this to be the end
of the Genoa Conference ? Had the thirty-four nations come
together simply to hear of an agreement signed behind the
back of the other Powers which seemed to open up an infinite
vista of revanche and conflict in the future ? Had not Dr.

Stormy Weather 91

Wirth, the German Chancellor, only a week before at the
Palazzo di San Giorgio approved in warm and apparently sin-
cere terms the idea of world-co-operation which the Conference
embodied ? Had he not dwelt on the economic solidarity of
the world and deduced therefrom "the principle that must
inspire our deliberations, that of the equal rights of all peoples
in our common labours ? "

The moment for signing and proclaiming the treaty seemed
to have been chosen with the object of causing the maximum
of provocation. M. Rakowsky informed his visitors that
there was nothing in this, and that it was purely fortuitous
that the treaty had been signed at Genoa. From other
quarters we were told that the Russians had begged the
Germans to sign the treaty as they passed through Berlin
early in April on their way to the Ligurian city.

British headquarters, we learnt, were greatly surprised and
annoyed at this untoward incident, which incidentally brought
much encouragement to those who desired the Conference
to fail and Mr. Lloyd George to share the catastrophe. The
British Prime Minister, on his side, had good reason to be
angry at what seemed to be nothing less than an " acte de
sabotage " against the life of the Conference, and was
certainly a poor return for the successful efforts the British
had made to secure equal rights to the Germans at the
Conference.

A distinction was made between Russia and Germany as
regards the moral implications of the Rapallo Treaty. The
Russians were not parties to the Treaty of Versailles, with
some articles of which the Russo-German instrument seemed
to be irreconcilable. Moreover Russia was not yet a recog-
nized Power. She was rather in the position of an enemy and
was therefore at liberty to make any separate agreements
she chose and to attempt to detach in her own interests any
single Power from the rest. So it was felt that, though Russia
was not blameless, by far the greater moral discredit fell
upon Germany.

Germany's line of defence was pretty obvious from the

92 The Genoa Conference

first. She complained that the discussions of the Russian
question had been removed from the " Political" Commission
on which she had a seat to the Villa de Albertis, where the
chief Powers carried on private and informal conversations
with the Russian Delegates, Germany being excluded from
these proceedings. Moreover, the German Delegation had
reason to believe that a final conclusion was about to be
reached. So, in self-defence they had been obliged to com-
plete a treaty which had been the subject of negotiations
since the previous month of January.

Herr Rathenau presented an apology on these lines at a
meeting to which many Press representatives were invited.
On this occasion he affirmed that four or five Englishmen,
including members of the British Delegation, had been to see
him about Russia. He had kept them informed of the
progress of the German negotiations with Russia, supposing
that they in turn would inform the British Prime Minister.
He also, he said, made repeated attempts to see Mr. Lloyd
George himself, personally, but without success. The
German Foreign Minister added that Germany had been on
the point of signing the treaty with Russia for several months,
but refrained in the hope that a European federation might
result from the Genoa Conference.

One can only say in answer to this that the treaty or the
imminence of a treaty was entirely unknown to Mr. Lloyd
George and his immediate entourage up to four o'clock on the
Monday afternoon following the Sunday on which it was
signed. As we shall see, the Prime Minister was quite explicit
and emphatic on this point.

The next news that reached the waiters in the Outer Courts
was that, as the Russo-German agreement seemed to challenge
the Treaty of Versailles in certain respects, the question
concerned all the Allied Powers. The old war alignment was
temporarily revived. We heard of a meeting held at Signor
Facta's residence, Villa Raggio, which was attended by Mr.
Lloyd George, the Lord Chancellor, Sir Philip Lloyd-Greame
and the chief delegates of Italy, France, Japan, Belgium, Czecho-

Stormy Weather 93

Slovakia and Rumania. The British Delegation submitted to
this meeting a draft protest they had previously drawn up
at the Hotel Miramare. This document was approved and
endorsed by the Powers present. Mr. Lloyd George indicated
the British view of the Russo-German agreement, drawing
a sharp distinction between the moral culpability of Russia
and Germany. A strong protest was necessary because this
action of the two Powers was a challenge of the whole spirit
and object of the Genoa Conference. Herein the British
Prime Minister was voicing the sentiments of all present,
and it was also generally agreed that the Conference was to
continue its work despite this recalcitrance of Russia and
Germany.
The formal protest, as finally adopted, ran thus :

"Mr. President — The undersigned Powers have
learned with astonishment that in the first stage of the
Genoa Conference, Germany, without reference to the
other Powers assembled there, has secretly concluded a
treaty with the Soviet Government.

" The questions covered by this treaty are at the
present the subject of negotiations between the repre-
sentatives of Russia and those of all the other Powers
invited to the Conference, including Germany ; and the
German Chancellor himself declared at the opening
session only a week ago that the German Delegation
would co-operate with the other Powers for the solution
of these questions in a spirit of genuine loyalty and
fellowship.

"The undersigned Powers have therefore to express to
the German Delegation in the frankest terms their opinion
that the conclusion of such an agreement, while the
Conference is in session, is a violation of the conditions to
which Germany pledged herself in entering the Conference.

" By inviting Germany to Genoa and by offering
representation to her in every Commission on equal
terms with themselves, the Inviting Powers proved their

94 The Genoa Conference

readiness to waive the memories of war and granted
Germany the opportunity of honest co-operation with
her former enemies in the European tasks of the Con-
ference. To that offer of goodwill and fellowship
Germany has replied with an act which destroys that
spirit of mutual confidence which is indispensable to
international co-operation and the establishment of
which is the chief aim of this Conference.

" At all Conferences unofficial conversations between
the parties are permissible and often desirable. They
are helpful so long as they are designed to facilitate the
common task and so long as the results are brought to
the Conference table for common discussion and decision.
But that is not what the German delegates have done.

" Whilst the Conference was sitting and whilst Germany
was represented on the Commission and Sub-Commission
charged with the negotiation of the European peace with
Russia on the basis of the Cannes stipulations, the
German representatives on that Commission have, behind
the backs of their colleagues, concluded in secret a treaty
with Russia on the very questions which they had under-
taken to consider in loyal conjunction with the repre-
sentatives of other nations. This treaty is not subject
to any examination or sanction by the Conference. We
understand that it is final and that it is not proposed to
submit it to the judgment of the Conference. It is, in
fact, a violation of some of the principles on which the
Conference is based.

" In these circumstances the undersigned do not con
sider it fair or equitable that Germany, having effected
her own arrangement with Russia, should enter into the
discussion of the conditions of an arrangement between
their countries and Russia ; and they, therefore, assume
that the German Delegates have by their action renounced
further participation in the discussion of the conditions
of an agreement between Russia and the various countries
represented at the Conference.

Stormy Weather 95

" Please accept, Mr. President, the assurance of our
high consideration.
" iSth April, 1922.

(Signed), " D. LLOYD GEORGE (British).
" Louis BARTHOU (French).
" FACTA (Italian).
" K. ISHII (Japan).
" G. THEUNIS (Belgian).
" EDOUARDBENES (Czecho-Slovakia).
" C. SKIRMUNT (Poland).
" M. NINCIC (Jugoslavia).
" CONST. DIAMOND Y (Rumania)."
And a representative of Portugal.

" To the

President of the German Delegation,
Genoa Conference."

The reader may imagine that after the publication of this
protest, rumours were as thick in the air of Genoa as the
arrows of the British archers at Agincourt. On arriving
at the Casa della Stampa one morning that week I was solemnly
asked when I was leaving Genoa, as the British Delegation
train was ordered for Saturday. On the Wednesday we
heard that Herr Wirth, the greatly respected German Chan-
cellor, and Herr Rathenau, with two secretaries, had conferred
with Mr. Lloyd George from twelve till two of that day with
a view to explaining their action over the treaty. The Chan-
cellor said the German Delegation had been much impressed
by the serious view taken of that action by the Allied Powers.
His main apology was again that the Germans had not known
what was going on at the Villa de Albertis, and had learnt
that the Great Powers were on the point of concluding an
agreement with Russia. The Germans, therefore, had had to
hurry on their own treaty in self-defence. To this and the
like Mr. Lloyd George made a firm but unprovocative reply.
He had no desire to humiliate Germany, but there were now

96 The Genoa Conference

only two courses open to her, either to withdraw the treaty
or withdraw themselves from all discussions of an agreement
with Russia carried on by the other countries in the First
Commission.

In all these dealings France acted in perfect accord with
England. But she took an even more serious view of the
new Russo-German instrument as she considered it a direct
violation of the Treaty of Versailles, especially of Articles
116 and 260.* In clause 2 of the Treaty Germany waived her
claims for compensation in respect of injury done by Bolshevik
legislation to private interests, with the proviso, Uen entendu,
that this waiver was withdrawn if Russia granted compensa-
tion to any other Powers. The two articles of the Versailles
Treaty forbade in advance any such surrender of rights and
claims by Germany, f

Amid the uncertainties and conflicting rumours of these
days it was pleasant news on the Thursday morning (April
20th) that Mr. Lloyd George proposed to address the Press
of the world that afternoon at four o'clock in the Palazzo di
San Giorgio. We accordingly met (Germans and all) in the
same great Sala in which the inaugural ceremony had taken
place. The political situation was reflected in the excited
or anxious anticipation with which the assembled corre-

* The French case in this regard was clearly set out in an article in the
Temps of April 2ist, a passage from which is quoted in Appendix IV

t Article 260 of the Treaty of Versailles provided that :

"Without prejudice to the renunciation of any rights by Germany on
behalf of herself or her nationals in the other provisions of the present Treaty,
the Reparation Commission may within one year of the coming into force
of the present Treaty demand that the German Government become pos-
sessed of any rights and interests of German nationals in any public utility
undertaking or in any concession operating in Russia . . . and may require
that the German Government transfer, within six months of the date of
demand, all such rights and interests and any similar rights and interests
the German Government may itself possess to the Reparation Commission."

The Commission had already exercised the power conferred upon it by the
article. On January 6th, 1921, it made the demand upjn Germany thus
authorized. In reply the German Government sent the Commission a list of
the rights and interests of which it could be obliged to become possessed.

Stormy Weather 97

spondents awaited the arrival of the British Prime Minister.
But if anybody expected that Mr. Lloyd George would show
any signs of care or depression, his arrival quickly dispelled
such a notion. He positively exhaled cheerfulness and con-
fidence as he walked round the tables to the chief seat. In
the Iliad the chief Hellenic deity receives the standing title
or epithet of NE^eXriytjosr//?, or the " Cloud Gatherer." If
I had to concentrate Mr. Lloyd George's attributes in a corre-
spondingly single term I think I should call him the " Cloud
Disperser." He certainly dispersed our clouds that afternoon
in the old Genoese palace. His first words were intended
as an immediate sursum cor da : " God is in His Heaven and the
Genoa Conference lives and is going strong." He proceeded
thus :

" There are two types of people in this world who want
news about the Genoa Conference. There are those who
desire it to succeed and those who distinctly do not wish
it to succeed. With regard to the latter, I am sorry
to disappoint anybody, but I am afraid I have not a
word of encouragement for those who wish the failure
of the Conference. Quite the reverse. I think we are
working through our difficulties, and working through
them quite successfully.

" There have been difficulties, of which you are quite
aware. In fact, most of my information about the Con-
ference I have taken from the Press. And from what
I read in the newspapers there have been two or three
very serious difficulties in the course of the last few
days. One of them was created by an incident which
I hope is of the past — by the Russo-German Agreement.
I sincerely trust that this is over for the present and that
it will present no further difficulties in the work of the
programme of the Conference.

" The other is the fundamental difficulties which arise
out of the negotiations with Russia. We are hoping
to receive the reply of the Soviet Delegation in the course
of the day. I am not going to anticipate the character

7

98 The Genoa Conference

of that answer, but I should be very surprised if it is
not of such a character as to justify us in proceeding
further with the Conference. We are meeting to-morrow.
We shall have a meeting of the Political Sub-Commission
in the afternoon to consider the Russian reply.

" Rather than make any further statement at this

stage I should prefer to invite questions from those who

are present, and therefore let me conclude now by saying

that I feel as confident as ever that this Conference will

be a success and that it will end in the pacification of

Europe and in the formulation of schemes which will

restore a very broken and devastated Continent."

Questions were then put in writing. In reply to the first,

which concerned the statement that he had previous knowledge

of the Russo-German Treaty, Mr. Lloyd George said that

Herr Rathenau had never made any statement of the kind

to him. He had seen the German Chancellor and Herr

Rathenau yesterday, and had Herr Rathenau said anything

of the sort to him he (Mr. Lloyd George) would have told

him it was untrue. He had known nothing about the treaty,

and only learned of its conclusion when on his way to confer

with his colleagues on Monday afternoon.

Next, Mr. Lloyd George stated that it had been suggested
to the Germans that they should either annul the treaty or
take no part in the discussion of a general Russian treaty.
They had chosen the second alternative. That incident was
therefore disposed of.

On the question of whether the treaty were not a mere
informality about which unnecessary fuss had been made,
Mr. Lloyd George said No. The treaty had been concluded
behind the backs of the Political Sub-Commission after the
Germans had been received on a footing of equality and had
been given the same number of delegates as the other Powers
on all the Commissions. If every Power were to conclude
separate treaties the Conference would break up. Had
France, England or Italy done such a thing he knew what
would be said. It would be called an act of disloyalty. There-

Stormy Weather 99

fore strong action had to be taken. He believed the action
taken would have an excellent effect upon the course of the
Conference. He was, however, convinced that neither the
Germans nor the Russians desired to wreck the Conference.

Asked then about the eventual conclusion of a pact of
guarantee on the part of all European nations, Mr. Lloyd
George said that unless the Conference ended in a pact of
guarantee that no nations would engage in aggression against
others, he considered that the Genoa Conference would have
failed. It was essential that the Conference should end with
a general pact of peace.

In reply to a question what sort of people did not like this
Conference, he said, " Quarrelsome people, who like to keep
up hatred and conflict between nations."

Challenged upon the practice of holding informal conver-
sations at international conferences, Mr. Lloyd George declared
the conversations to be in his opinion essential to the success
of all conferences. They were not merely right and fair, but
they were eminently desirable.

Referring once more to the Russo-German Treaty, Mr.
Lloyd George said again that he was hopeful that the incident
was closed. Were he to give a detailed answer he might help
to keep the controversy alive. It was better not to insist
upon it. The Russo-German Treaty was not, in his view,
an attempt to wreck the Conference, though it had endangered
the Conference. However, a considerable part of the work
of the Conference would probably have to be carried on
by the League of Nations, to which Russia and Germany
did not belong. The League of Nations could not assure
peace in Europe so long as more than half of Europe was
outside it. It could never guarantee the peace of the world
until all nations belonged to it.

Some representatives of the German Press having then put
questions as to the circumstances in which the Russo-German
Treaty had been signed, Mr. Lloyd George said that he re-
frained deliberately from answering these questions because
he did not wish to aggravate the situation. If the questioners

7*

ioo The Genoa Conference

insisted, he would answer them, but asked them to reflect
before insisting. The questions were then withdrawn. In
conclusion, Mr. Lloyd George said he believed in an absolutely
favourable issue of the Conference. They were getting over
their difficulties. The more important the Conference was
the greater were the difficulties attending it. If they worked
together they might restore the harmony of Europe. There-
fore he was a profound believer in a favourable issue to the
Conference.

Mr. Lloyd George's answers were translated as they were
given by Mrs. Agresti into Italian and M. Camerlingh into
French.

Mr. Lloyd George certainly succeeded on this pleasant
occasion in infecting us with something of his own invincible
confidence. We left the Palace feeling greatly refreshed and
encouraged.

CHAPTER VII

LE SAVONNAGE DE LA TEMPETE

T N one sense the Russo-German incident was closed. Its
immediate menace to the life of the Conference was
safely weathered. But its undulations continued. It greatly
affected the general politics of Europe and thus continued to
react sensibly on the Genoa Conference. I do not apologize
to the reader for dealing with the event in considerable detail.
It would be a mistake to regard it as an insignificant " breeze "
which agitated an international conference during the early
days of its life and work. The Russo-German Treaty was
recognized at once as having a far deeper significance. It
might very well prove to be the most decisively important
event in European or world politics since the war. Its poten-
tialities were incalculable. It threatened to revive the old
bi-castral system in Europe, to organize the old continent once
more in two armed camps, to open an infinite prospect of
revanche and conflict and even possibly to repeat in no distant
future the shambles of 1914 — 1918. These were the darker
reflections suggested by the news of the treaty. The wiser
thought of the time realized how essential it was for the sake,
not only of the Genoa Conference, but of human welfare in
general that Russia and Germany should be dealt with on
human and conciliatory lines, and not forced by suspicion and
hostility into a " fierce friendship," with its point turned
implacably against the whole of the West.*

Meantime Mr. Lloyd George's optimism seemed to be at
once justified. The Russian reply to the financial and other
questions submitted to them was regarded as furnishing a

* See Mr. Lloyd George's statement in the next chapter.
101

102 The Genoa Conference

fair basis for discussion, and the German response to the
protest of the Allied and Associated Powers appeared finally
to close the incident. Herr Rathenau had been in the mean-
time again addressing meetings of journalists and explaining
the motives of the treaty. On the day, I think, on which
the German reply was issued, I heard him deliver a conciliatory
speech in the Eden Palace Hotel, where the delegates from the
Fatherland were housed.

The German Foreign Minister was one of the most distin-
guished and attractive figures in the Conference. He gave,
to me at least, the impression of great strength and solidity
of character. His intellectual power was unquestionable.
So also were his graceful linguistic attainments. It is surely
given to few men to be able to make public speeches succes-
sively in three leading languages. Yet Herr Rathenau could
perform this feat in German, English and French.

I was in Germany soon after the Armistice, and was struck
then, as I was again in Genoa, with the quiet and dignified
patience with which the Germans have faced a condemnation
at the bar of world opinion heavier than any nation has ever
incurred in the course of history. Certainly I think Dr.
Rathenau on this occasion made a favourable impression
on his hearers.*

Here follows the formal German answer, in its original

rather foreign English :

" German Delegation,

" Genoa, April 2isf, 1922.
" To the President of the Italian Delegation.

" Mr. President, — In response to the Note of i8th
inst, signed by you and the Presidents of the French,
British, Japanese, Belgian, Czecho-Slovak, Polish, Serb-
Croat-Slovene, Rumanian and Portuguese Delegations,
I beg to remark the following :

" Germany has recognized the Russian Sowjet-
Republic since several years. A settlement had, however,

* Dr. Rathenau was assassinated in Berlin on June 24. By this insane act
Germany and Europe were deprived of one of their ablest and most en-
lightened statesmen.

Le Savonnage de la Tempete 103

to be made between the two countries with refer-
ence to the consequences arising from the state of war,
before it was possible to renew normal diplomatic rela-
tions. The negotiations which were carried on between
the two Governments over this question had already
several weeks ago progressed so far that conclusion was
possible.

" It was of especial importance for Germany to come
to an understanding with Russia, because here the possi-
bility was given of establishing peace with one of the
great belligerent Powers under conditions excluding all
lasting debtorship and enabling, on a fresh basis and
unencumbered by the past, the renewal of friendly
relations.

" Germany went to Genoa with the hearty desire to
work in joint with all nations for the restoration of the
suffering European continent, trusting in the mutual
understanding for the troubles of all its parts.

" The propositions of the London programme left
Germany's interest out of regard. To sign them would
have meant to call forth heavy reparation-claims for
Russia against Germany. A number of clauses would
have led to burdening the consequences of the Tsaristic
war-time legislation on Germany alone.

" Repeatedly, and in extensive discussions with mem-
bers of the Delegations of the inviting Powers, the
German Delegation called attention to these serious mis-
givings. But it was without success. On the contrary,
the German Delegation became aware that the inviting
Powers had entered into separate negotiations with
Russia. The information which came to hand about
these negotiations led to the conclusion that an agree-
ment would be arrived at shortly, but that it was not
contemplated to take the just claims of Germany into
regard. Upon this the German Delegation left no doubt
that they were forced to pursue their interests alone, as
otherwise they would have come into the position of

104 The Genoa Conference

being confronted in the Commission by a draft which
was unacceptable to them, but which was already agreed
upon by the majority of the delegates on the Commission.
For this reason the treaty with Russia was signed on
Sunday evening in exactly the same terms as had been
drafted weeks ago, and was immediately published.

" This course of action most clearly shows that the
German Delegation did not proceed to negotiations
with Russia from a lack of solidarity, but from compelling
reasons. It just as clearly shows that the German
Delegation have strived to keep clear of all secrecy in
their procedure.

" It would be quite in accordance with the wishes of
the German Delegation if the Conference should succeed
in arriving at a general settlement of the Russian ques-
tion and if the German-Russian Treaty might be em-
bodied in this general arrangement. This would be very
well possible. The treaty in no wise affects the relations
of other States to Russia. It is furthermore, in all of
its provisions, guided by the idea, the realization of
which you justly proclaim as the chief aim of the Con-
ference, that is, by the spirit which looks upon the past
as definitely closed and seeks to build a foundation for
mutual, peaceful restoration.

" As regards the further treatment of the Russian ques-
tion in the Conference the German Delegation also think
it right that they should only take part in the delibera-
tions of the First Commission on questions correspond-
ing to those already settled between Germany and Russia
in case their collaboration should be especially asked
for. On the other hand the German Delegation remain
interested in all those questions referred to the First
Commission which do not relate to the points settled in
the German-Russian Treaty.

" The German Delegation welcomed with satisfaction
the development which the discussions of the Commissions
have taken. They are at one with the spirit of solidarity

Le Savonnage de la Tempete 105

and good faith that animated this work. Far from
thinking of turning away from the common work of
Europe, they are prepared to take part in the tasks
allotted to the Conference of Genoa with a view to
reconcile the nations and to adjust the welfare of the
East and the West.
" Accept, Mr. President, the assurance of my highest

esteem.

(Signed) "DR. WIRTH."

To the British this Note seemed fairly satisfactory and
conclusive. Not so to the French, who thought the Germans
had misinterpreted the British or Allies' suggestion. The
Allied Note had said that the Germans should withdraw from
the discussions of the Commission when Russian questions
were under consideration. The Germans offered to with-
draw only when questions came up which fell within the
scope of the new Russo-German Treaty. This difference
seemed negligible, but the French also held strongly the view
that the treaty was repugnant to the Treaty of Versailles.
They dispatched, therefore, two Notes, one to the various
Allied Governments, pointing out this repugnancy, and another
to Signer Facta as President of the Conference. This latter
ran thus :

" Genoa, April 2ist, 1922.

" Sir, — My only knowledge of the text of the Note
which the German Chancellor is said to have forwarded
to you is derived from the version published in the Press,
which received it from Herr Rathenau. I am anxious,
however, to acquaint you without delay of the express
reservations suggested by a document which seems to
me to be inadmissible if, as everything leads me to believe,
the text is actually authentic.

;' The German Delegation argues that the conclusion
of the treaty with Russia was justifiable. The French
Delegation is of opinion that this treaty contravenes the
principles of the Cannes Resolutions, to say nothing of

106 The Genoa Conference

other treaty engagements of Germany. On the other
hand, the Allies, who assert that the German-Russian
Treaty impairs the spirit of mutual trust which is indis-
pensable for that international collaboration which it
is the aim of the Conference to secure, have unanimously
arrived at the opinion that it would be incompatible
with their dignity to continue to co-operate with the
German Delegates on the Commission which deals with
Russian affairs. The German Note attaches to the
letter of April i8th an interpretation which cannot be
admitted.

" It would be superfluous at this point to criticize in
detail the allegation advanced by the German Delegation ;
the loyal and open conduct of the Inviting Powers is
fully adequate to repudiate these mendacious assertions.

" I feel convinced that you will recognize the necessity
of summoning the heads of the Delegations who signed,
at the meeting presided over by yourself, the Note c f the
1 8th instant, in order that they may discuss the situation
created by the German reply. To be of any value, the
discussion in question should take place at the earliest
moment possible.

" I have, etc., (Signed) "Louis BARTHOU.

"The President, Genoa Conference."

This letter, it will be seen, is strongly worded. The ex-
pression " mendacious assertions," or, as another version had
it, " lying allegations," seems to be another symptom of that
animus armatus, to use the Ciceronian phrase, which France,
no doubt with every excuse, has continued so long into the
days of peace. M. Barthou's letter provoked a counter-
protest from Dr. Wirth in which the German Chancellor depre-
cated this particular sample of strong language. " If this
expression has been really used," he wrote with quiet humour,
" I should find myself obliged to protest energetically against
an offensive accusation that wounds the spirit of Genoa on
a day of festivity for the Conference "• — the day being that on

Le Savonnage de la Temp6te 107

which the King of Italy paid a visit to Genoa and the Con-
ference.

These " little lovings " between French and Germans did
not conclude the proceedings with regard to the famous
treaty. On Saturday afternoon, April 22nd, Signer Facta
called a meeting of the ten members who had signed the
original letter of protest, at which meeting M. Barthou made
a statement on the lines of his letter given above. Mr. Lloyd
George, while admitting that exception might be taken to
one or two statements in the German reply, regarded the
Note on the whole as honestly conciliatory, and the last para-
graph in particular as a complete acceptance of the alternative
course suggested by the letter of protest. He himself could
see no difference between that alternative as suggested and
as accepted. If Germany was excluded from taking part in
discussions on any subject falling within the scope of the
treaty, he did not know there was any other important
subject coming before the Commission on which she would be
admitted. Did M. Barthou know of any ? M. Barthou made
no answer, and it was finally agreed that a reply to the German
reply should be drafted in which, after the example, I suppose,
of Charles II. and his courtiers, it was to be assumed that the
German acceptance of the alternative covered the ground
intended to be covered by the letter of protest.

The last formal event in the story was a meeting of the ten
Protesters on Sunday morning, April 23rd, when the draft
of the final reply was considered. It opened with a statement
by M. Bratianu, head of the Rumanian Delegation, on behalf
of the Little Entente and Poland. He thought the Russo-
German Treaty emphasized the need of perfect solidarity
among the authors of the Peace Treaties. He very naturally
wished the " incident " to be finally disposed of, in order
that the practical work of the Conference might continue.
He was followed by Mr. Lloyd George, who uttered a word of
warning. The British Empire was most anxious to work in
close co-operation with the Allies, but if the British people
began to fear that the co-operation of the Allies was leading

108 The Genoa Conference

in any way to the maintenance of feuds in Europe and the
obstruction of real peace, their point of view might be con-
siderably changed. He felt bound to make this quite plain.
The British Empire was set on peace and on the surmounting
of all obstacles in the way of pacification. M. Barthou
claimed similar views and objects for the French Delegation
and democracy. Mr. Lloyd George then explained the draft
reply, which had been drawn up by the legal experts on the
lines of the previous day's discussion. This was adopted,
and here is the concluding document in the dossier of the
Russo-German Treaty :

"Mr. President, — The undersigned desire to acknow-
ledge the receipt of your reply to their Note of April
the i8th, indicating the attitude which they felt bound
to adopt in view of the treaty concluded between the
Russian and German Delegations. They note with
satisfaction that the German Delegation realizes that the
conclusion of a separate treaty with Russia on matters
falling within the purview of the Conference renders it
undesirable that that Delegation should participate in
future in the discussion of the conditions of an agreement
between Russia and the various countries represented
at the Conference.

" The undersigned would have preferred to refrain from
further correspondence on the subject. There are, how-
ever, certain statements in your letter which they feel
it their duty to correct.

' Your letter suggests that the German Delegation
have been forced to conclude a separate agreement with
Russia by the refusal of members of the Delegations of
the Inviting Powers to consider the grievous difficulties
which the proposals formulated by their experts in London
would have created for Germany. The undersigned repre-
sentatives of the Inviting Powers have made inquiries of
the members of their respective Delegations, and find that
there is no shadow of justification for this statement.

Le Savonnage de la Tempete 109

" On various occasions members of the German Delega-
tion have met and talked with members of the Delegations
of the Inviting Powers, but never has it been suggested
that the London proposals afforded no basis for discussion
in Conference, and that the German Delegation were
about to conclude a separate treaty with Russia.

" The allegation that the informal discussions with the
Russians on the subject of the recognition of debts ex-
posed the Delegation to the risk of being confronted with
a scheme unacceptable to Germany, but already approved
by the majority of the Members of the Commission, is
equally unfounded. No scheme would, or could, have
been accepted by the Conference without the fullest
opportunity for discussion in the competent committees
and sub-committees, and in these Germany was repre-
sented on a footing of equality with other Powers.

" A misconception of the scope of the experts' pro-
posals or misunderstanding of the informal conversations
with the Russians might well have justified a request for
full discussion in the Committees of the Conference.
They can provide no justification for the action which
has now been taken, and the undersigned can only regret
that your Note should have attempted in this way to
impose on the other Powers the responsibility for a pro-
ceeding so contrary to the spirit of loyal co-operation
which is essential to the restoration of Europe.

" The undersigned expressly reserve for their Govern-
ments the right to declare null and void any clauses in
the Russo-German Treaty which may be recognized as
contrary to existing treaties.

" The incident may now be regarded as closed.

" Please accept, Mr. President, the assurance of our
high consideration.

[Here follow the signatures of the Ten Powers who signed
the Letter of Protest.]

" The President of the German Delegation,
Genoa Conference."

CHAPTER VIII

BRITISH AND FRENCH POLICY

BUT even yet the echoes of the Rapallo bomb were not
stilled, despite the official assurance that the incident
was closed. France and Poland, in particular, realized at
once the significance of the treaty for themselves. French
opinion was greatly excited, and unfortunately came to the
conclusion that the treaty was in some way the outcome of
the Genoa Conference. This belief was fostered by statements
in the French and British Press, which reacted injuriously on
the Conference, and were probably intended by their authors
to do so. One English paper, conspicuously hostile to Mr.
Lloyd George and not desirous that he should succeed at
Genoa, published a statement that the Prime Minister had
been having private conversations with M. Krassine, and had
told that leading Bolshevist delegate that he was prepared
to cancel the whole of the Russian war debt to England.

At this point Mr. Lloyd George intervened through Sir
Edward Grigg to deny these allegations. He had had no
private and secret confabulations with any Bolshevist, and
when he had met the Russian Delegates, in company with his
colleagues, he had given them to understand the exact opposite
of what he was accused of saying. He had told them there
was no question of remitting the Russian war debt. These
statements, continued the Prime Minister, were made with
the object of wrecking the Conference, and they aroused strong
feeling in France."',.' It was impossible for him to turn aside
from his tasks in Genoa and pursue every misstatement with
a contradiction. He therefore appealed to the British public
not to believe any statement contained in the Times or the
Daily Mail about Genoa until he was able to deal with it in

no

British and French Policy ill

Parliament. He would take the earliest opportunity of
putting the British people in full possession of the truth. The
political situation in Europe and at the Conference was ex-
tremely delicate, and it was quite undesirable that any seeds
of distrust should be needlessly sown.

This delivery of " one between the eyes " to two great
newspapers caused some amusement to those whose con-
sciences were not wrung, and perhaps some little embarrass-
ment to the representatives of the offending papers. The chief
correspondent of the Times, however, did not turn up at feed-
ing-time in the University, but obtained his oats and chaff
elsewhere.

On this occasion the Prime Minister expounded once more
through his genial secretary his policy with regard to Russia.
He had been trying to get the French to understand the spirit
and purpose of that policy — not, he thought, without some
success. The view of the British Delegation was that if peace
was not arranged with Russia, or some honest effort made to
that end, and if the policy of the more prosperous European
Powers was to leave Russia and Germany in isolation and
distress, the inevitable result would be the conclusion between
Russia and Germany of a " fierce friendship," with its point
directed against the whole of the West. " We will have
nothing to do with such a policy," said the Prime Minister.
' We are not afraid of German or Russian menaces, but we
are determined to do our utmost to prevent Europe being
turned again into a shambles. We are thinking of the Russian
people, and we want, if possible, to make peace with that
people, whatever may be the nature of their Government."
The Russians, he reminded us, had fought gallantly for us for
two years.* They had suffered greater casualties than any
other of our Allies, and the people, as a whole, were not re-
sponsible for what had passed in Russia since the Revolution.
On the contrary, those who were suffering most terribly at

* On another occasion Mr. Lloyd George remarked that the Russian
pressure upon Germany at the beginning of the War had made possible the
Battle of the Marne.

112 The Genoa Conference

the present time in Southern Russia were just those who
had fought hardest and longest against the Soviet regime.
" We want to adopt an open and human policy towards
Russia if we can persuade her to accept conditions of inter-
national intercourse which are traditional and necessary
among civilized Powers."

On this Russian question Mr. Lloyd George always acted
in the spirit of the wise old German proverb : " Hinter dem
Berge sind auch Leute " —behind the mountains of our
prejudice and ignorance, behind Messrs. Lenin, Tchitcherin
and Rakowsky, there are people — in this case some one
hundred and twenty million people — of like passions with
ourselves.

How little progress such ideas had made in France was
evident from the speech by M. Raymond Poincare, Prime
Minister of the French Republic, which he delivered at this
critical moment at Bar-le-Duc before the Council-General of
the Meuse, and which served once more to trouble the waters
at Genoa. It should be noticed that this speech was not an
impulsive and impromptu utterance, but a very deliberate
and carefully prepared discourse.

Speaking to an audience of " the French of the frontier "
whose country had been ravaged, he declared that, though the
cost of the war had to be borne by the victorious nations,
the cost of repairing the actual damage done and the cost of
pensions had to be paid by the enemy. The Treaty of Ver-
sailles also prescribed that Germany " should be disarmed
and definitively reduced to military impotence." " If these
clauses had been regularly applied, France would have
declared herself satisfied," said M. Poincare.

The Prime Minister ridiculed the accusations that France
is imperialist and anxious for conquests. " I do not know a
single French politician who has ever dreamed of territorial
annexations," said he, adding, " All we ask for to-day is the
execution of the treaty." He warned his hearers that " it
is not by precipitate action and by taking steps without
reflection that we shall obtain the execution of the treaty.

British and French Policy

It can only be by persevering and methodical action. But
we must in the end obtain it. It is the question of the peace
of Europe, of our national prosperity, of our future."

M. Poincare referred for a moment to the German-Bolshevist
Treaty as a manifestation in the light of day of the sympathies
between the Germans and Bolshevists which had long been
developing hi the shadows, and used this treaty as a prool
that the Cabinet was right to insist on 18 months' military
service. He mentioned the German police formations, com-
posed of veteran non-commissioned officers " ready to be
transformed overnight into military cadres." It all looked,
he said, as if " the Pan-Germans were on the look-out for an
occasion to foment trouble sooner or later in the marches of
the East, and to retake by force the Polish regions taken from
Germany by the Treaty of Versailles." The work of the
Inter- Allied Commission was far from completion, and " it
will certainly be indispensable that the Allies should main-
tain in Germany means of effective control over air organiza-
tion, military organizations, and armaments." M. Poincare
added that " we desire with all our hearts the day when we
can ourselves disarm, but Germany must first be genuinely
and completely disarmed. "

He next turned to May 3ist, the date on which Germany
must accept or reject the conditions laid down by the Repara-
tion Commission, and said that in the case of German default
" the Allies will have the right and, consequently, the duty,
in order to protect their interests, to take measures which
beyond doubt it would be infinitely desirable to adopt and
to apply in common accord between them, but which by the
terms of the treaty could in case of necessity be taken by each
interested nation and Germany, by the Treaty of Versailles,
would be obliged not to regard them as acts of war. We
wish ardently to maintain on this capital occasion the co-
operation of all the Allies, but we will defend the French cause
in complete independence, and we will not give up one of the
weapons which the treaty gives us." (" Nous souhaitons ardem-
ment de maintenir, en cette occasion capitale, le concours

8

114 The Genoa Conference

de tous les allies ; mais nous defendrons, en pleine inde-
pendance, la cause franchise et nous ne laisserons tomber
aucune des armes que nous a donnees le traite.")

Then M. Poincare turned to Genoa. The treaty between
the Germans and the Bolshevists, whatever its secret clauses
might be, " in any case sets the seal on a rapprochement which
may become to-morrow a direct menace to Poland and an
indirect menace to us." French opinion would have under-
stood the dissolution of the Conference as the result of the
action of the Germans and Bolshevists, but the Allies were
indulgent, and the French Delegation, " anxious to show once
more its co-operation, associated itself with the indulgent
motion addressed to Germany."

France publicly showed herself solid with the other Powers
represented at Genoa, but, " having given this new proof of
our pacific spirit and our conciliatory intentions, we remain
more firmly attached than ever to the ideas which the Cabinet
has explained before Parliament and which remain our law.
If the French Delegation cannot make them triumph at Genoa
we shall regretfully be unable to continue our co-operation at
a Conference of which we shall at least have sought to assure
the success. Whatever may from henceforth be the attitude
of Germany and Russia, we have before us a political situa-
tion which is of a nature to compromise and, perhaps, to
upset the equilibrium of Europe, and which it is no longer
possible to control by the aid of simple economic or financial
formulae, nor even by means of great international conferences,
at which sit side by side the representatives of every human
tongue. It is neither, alas ! consortiums of bankers nor
recommendations, however wise, on questions of exchange or
transports which will restore on a firm basis the peace of
Europe."

A great part of the German people, M. Poincare went on to
explain, are filled with the idee-fixe which develops their hopes
of revenge, and the Bolshevists have another idee-fixe which
gives them the illusion of bringing a new gospel to the world.
Against these forces other moral forces must be employed.

British and French Policy us

" We will remain at Genoa only on condition that there is
no concession to Germany or to Soviet Russia, and that we
hold firm to the terms of our memorandum." (" Nous ne
resterons, bien entendu, a Genes qu'a la condition de n'y
faire aucune concession, ni a I'Allemagne, ni a la Russie des
Soviets et de nous tenir tres fermement aux donnees de notre
memorandum.") " But, whatever happens to the Conference
the Allies will have to examine without delay the new fact
created by the German-Russian Treaty, its effects on the
Treaty of Versailles, and its effects on the future and the
peace of Europe. It certainly puts before the Allies one of
the most formidable problems they have had before them
since the Armistice. Let us hope they will resolve the
problem in concord and union by acting on those great prin-
ciples for which they fought — right, liberty, and spirit of
modern civilization."

Before he concluded with an appeal to Frenchmen to sink
their differences and stand together at this difficult time,
M. Poincare once more declared, " We are determined to
keep what has been given us by a treaty for which our heroes
paid with their blood."*

By a happy coincidence it was just now that the Anglo-
American journalists in Genoa had decided to give a dinner
to Mr. Lloyd George, and this took place at the Ristorante
Olimpia, two days after M. Poincare's speech at Bar-le-Duc.
It is useful to read the two speeches in succession, because
they represent the respective spirits and policies which were
striving for prevalence at Genoa. There was on the one
hand the spirit that tended to maintain the war atmosphere
and the war alignment, which stiffly insisted on a full measure
of penal retribution, which was influenced mainly by self-
regarding and particularist motives : in short, the spirit of
antagonism and^suspicion.f On the other hand was the spirit
that desired to obliterate the old bi-castral division in Europe,

* Times, April 25th.

•f In this connection the reader must always make full allowance for the
past experience of France and for her existing position, geographical and
otherwise, with regard to Germany.

8*

116 The Genoa Conference

to make legitimate concessions in the interests of peace, to
remove and avoid all occasions of future offence and hostility,
and to restore a real comity of European nations, based upon
good-will and self-respect : in brief, the spirit of reconciliation
and trust.

The dinner at the Genoa restaurant was a lively event.
The British Prime Minister was received with a genuine and
even affectionate enthusiasm. A number of gentlemen who
had once been, but were no longer, employed by the Times,
had formed a separate table within the triclinium, and
described themselves in two large-type placards as " The
Times Boot-Club." This caused much hilarity among the
diners, the chief guest especially enjoying the joke. The
speeches of Mr. Adam (correspondent of the Evening Standard),
the chairman, and of Sir Edward Grigg also contributed to
the merriment. Though the Conference was supposed at the
moment to be in full crisis and in positive danger of disso-
lution, there was no evidence of depression or apprehension
at this " Olimpian " feast. Mr. Lloyd George is not tempera-
mentally despondent, and only a certain brooding thought-
fulness before he rose to speak urbi et orbi betrayed his
consciousness of a fateful and arduous moment :

The Prime Minister said : " Mr. Chairman, ladies and
gentlemen : After the very witty speech which we have
heard from the Chairman I feel more timid and modest
than usual in addressing this gathering. I do not profess
to have the command of metaphor and simile which your
Chairman possesses, and I congratulate him upon the
striking originality of the phrases which I heard for the
first time from his lips.*

" Being a mere politician, I must avoid the flowery

path along which he has been treading, and, as is the

wont of politicians, I shall walk along the paths of plain

fact and truth.

" At the end of his speech the Chairman gave a very

* The Chairman had humorously recalled some of the Prime Minister's
more recent and picturesque metaphors.

British and French Policy nr

vivid and a very accurate account of the aims and objects
of the Conference which has brought us all together. I
agree with everything he said about it. It is, in my
judgment, the most important Conference that has ever
been held in Europe. Whether it succeeds or whether
it fails, it will have a lasting effect upon the history of
this great Continent ; and since there are other con-
tinents besides this — although we are not officially
conscious of the fact — and I believe the other continents
are officially unconscious of our existence, the fate
of this old continent will have an effect upon others as
well. Therefore, the Genoa Conference is a landmark
in the history of the world.

" When war ended we were full of hopes that it meant
the end of the reign of brute force and the determination
of issues, great and small, by the carnage of the sword.
Whether that hope is to be realized or not depends largely
on the direction Europe will take after the Genoa Con-
ference. The trouble of Europe is there are too many
unsettled questions, and there is not one of those unsettled
questions which does not contain in itself the possibility of
a European conflagration. We have gathered here to-
gether to see whether it is not possible to find a settlement
that will be acceptable to the common sense and to the
conscience of the peoples of Europe. There are some
people who are very impatient because we have not
discovered these solutions in the course of a single fort-
night : it will take longer. I remember very well, when
we went to Washington, to the great Conference there,
we had estimates as to how long it would last, and I
remember very well when our Delegation went there,
I will not say that they hoped to be back in a month,
but there was a general feeling that it certainly would
not last very much longer. It went on one month, two
months, three months, but it accomplished its purpose,
and there is no man in America, and there is no man in
Europe, who would say that it was not worth every hour,

118 The Genoa Conference

every day, every week, every month, that was spent.
Even if six months had been spent, or a year had been
spent, it was worth all the effort. I do not say we are
going to take three months here, but we must not expect
to overcome rooted difficulties, to reconcile, I will not
say, antagonistic positions but divergent positions,
all in the course of a fortnight, or three weeks, or even
a month. There is no virtue which one ought to have
to draw his cheques oftener upon than that of ' patience.'
We need patience, but with patience I feel as con-
fident to-day as I did when I came here that we
are going to see Europe through. We are going
to settle these problems. But they are vast problems.
Take some of them. You have practically the whole
of the frontiers of Eastern Europe unsettled. There is
hardly a line there which is accepted by Europe as a
whole. That is the present position. From the Baltic
down to the Black Sea there is hardly a line there which
is not contested, and every one of those lines involves in
itself the possibility of a terrible conflict in Europe.
In each of these issues you find different complications.
Sometimes it is the fault of one country, sometimes it is
the fault of another. Sometimes it is perhaps the fault
of neither, but of the terrible muddle of races which
you have surging like a cauldron in the centre of Europe,
which have not yet settled down, and which at one
moment belong to one combination and at another
moment to another combination — races breaking into
a country which seemed to have been populated by a
totally different race. It is just like the earth boiling
before its old crust had settled down. You have this
racial lava surging right through the centre of Europe,
and unless you settle the lines there which will be accepted
by everybody, there are interminable possibilities of
future conflicts that will embroil the whole of Europe,
and whether America will it or not, she will inevitably be
brought in as the last war brought America in.

British and French Policy 119

" Those are some of the difficulties ; but they are not
all. There are some issues which will have to be settled
which have been perforce ruled out of the purview of
this Conference. You have Germany and Russia, who
are in a condition of semi-antagonism to the rest of
Europe. There is a state of suspended and barely
suspended conflict. That means two-thirds of Europe —
Germany and Russia — and, let me speak quite frankly,
anybody who imagines that you can permanently, by
any combination, keep down two great peoples repre-
senting two-thirds of Europe, must be either blind or
blinkered. It is an impossibility ; it is a folly ; it is an
insanity ; you must arrive at an understanding which
will include the whole of these peoples. European
peoples must be on good terms with each other. We are
speaking quite frankly. You have to look at the possi-
bilities, if Europe is to be divided permanently into two
hostile camps. The Russo-German Agreement has been
a revelation to some people. I ventured to give the
warning myself a long, long time ago as to what was
inevitable unless there was a good understanding.* It
is absolutely inevitable — there is the possibility of a hungry
Russia, equipped by an angry Germany. How long will
it be before Europe is devastated, if that represents the
permanent policy of any combination in Europe ?

" For the moment we belong to a dominant group
which won the Great War. We are dominant and we

* In his far-sighted Memorandum presented to the Peace Conference on
March 25th, 1919, Mr. Lloyd George dwelt at length on this danger : " The
greatest danger I see in the present situation," he wrote, " is that Germany
may throw in her lot with Bolshevism and place her resources, her brains,
her vast organizing power at the disposal of the revolutionary fanatics whose
dream it is to conquer the world for Bolshevism by force of arms. This
danger is no mere chimera." He envisaged the spectacle of " nearly three
hundred million people organized into a vast red army under German instruc-
tors and German generals, equipped with German cannon and German
machine guns and prepared for a renewal of the attack on Western Europe."
" If we are wise," concluded the British Prime Minister, "we shall offer to
Germany a peace which, while just, will be preferable for all sensible men to
the alternative of Bolshevism."

120 The Genoa Conference

are triumphant. Those things do not last for ever. If
our victory degenerates into oppression, if it is tinctured
and tainted and corrupted with injustice, if there is a
feeling in the conscience of mankind that we have abused
the triumph which God placed in our hands, vengeance
will inevitably follow as it followed in the wake of the
act which outraged the moral sense of the world on the
part of Germany.

" We must be just ; we must be fair ; we must be
equitable ; we must show restraint in the hour of our
triumph. Otherwise Europe will be a welter within the
life-time even of men like myself and others whose hair
is grey, if we live even to the ordinary span of human life.
And those who are younger amongst us will inevitably
see it.

" That is why I have wrought hard to make Genoa
a success. I am alarmed at the storms which are gather-
ing on the horizon and rising higher and higher in the
firmament over Europe. They may not break imme-
diately, but they will inevitably do so unless by some
means the atmosphere can be cleared and we get a fairer
day.

" I have been talking in an alarmist vein to-night. I
do not think I am unduly alarmist — if Genoa fails. I am
amazed at the people who ignore these portentous facts
and concentrate on selfish trivialities in the face of the
grave portents which I can see in the future. That is
why I want Genoa to end in a real pact of peace. With-
out that Genoa will have accomplished nothing. It
may redress exchanges ; it may improve currencies ;
but it will not have accomplished the main purpose for
which it was summoned. It is a gathering of the nations
of Europe to take counsel together to see whether they
cannot clear up the difficulties which are full of menace
for the peace of each and for the peace of all.

" I am glad of this opportunity of talking freely to the
representatives of the great British and American Press.

British and French Policy 121

Frankly, I wish America had been here. I know every
time a British representative says that it is misinterpreted
in America. They think we want America here for
some selfish purpose. We do not. We want America
here because she has a peculiar position, a peculiar
authority ; her very aloofness would give her a right
to speak that we who are entangled in all these old con-
troversies can hardly command. If America were here
she could speak with an authority, with an influence,
that no other country can possibly command. We
have all been mixed up in these quarrels in Europe —
time whereof the memory of man runneth not to the
contrary. Sometimes on one side and sometimes on
another there are old memories ; there are ancient pre-
judices ; and they are always coming up whenever you
advocate any particular course. America would come
fresh, free, independent, disentangled and with an
authority which springs from her great position which
would have been invaluable, and her voice would, I know,
have been the voice of peace, conciliation and good
counsel. But it is too late to make that appeal now.
America is not here, and Europe has got to do her best
to solve her problems in her own way.

" With your help — and we need that — we can do it.
Much depends on what the Press says in the way of
instructing public opinion. You can excite public opinion,
you can arouse prejudices, you can stimulate passions,
you can make people angry. That is not an atmosphere
in which you can make peace. On the other hand, you
can counsel patience, you can advise conciliation, you
can inculcate the spirit of good fellowship and goodwill ;
and if you do that, you will have had a part in a great
deed — a great historic deed. You are not here, if I
may very respectfully say so, merely to record impressions.
You are not here merely to tell a tale. You are not here
merely to interest those whom you represent. You are
here to instruct them. You are here to sustain them.

122 The Genoa Conference

You are here to direct ; you are here to guide. Your
part in this Conference is as important as ours. Without
your co-operation we cannot achieve anything. With it,
it will be difficult enough.

" I beg you, in the interest of the future of the world,
to do your best not to thwart, not to add to the myriads
of obstacles that are in the way, but to help to clear the
path, to straighten it out, and together we shall be able
to rejoice in looking back that we all took part in some-
thing that will be a pride to the end of our days for
what we have done in the service of humanity."
A collation of these two speeches throws much light on
the differences between French and British policy. There
is a fundamental antithesis of mentality between the two
races which seems to make any permanent political collabora-
tion difficult, if not impossible. The French are intensely
logical and syllogistic in their habits of thought. They
will build a logical structure on premises which may be quite
unsound, and they will defend and maintain it with the utmost
obstinacy. They will push a questionable proposition or
theory to its logical issues as though it enshrined ultimate
truth. Let us take one example. They have formed an
opinion that " Germany understands nothing but force."
A generalization of that sort can be safely accepted and
applied only with many reserves, but the French have con-
strued it literally and based upon it a whole system of policy.
The quartering of black troops in the great and dignified city
of Frankfort is only an incident in the working out of this
logical process. The English, or, as I suppose I ought to say,
the British, are not likely to make colossal and nemesis-
provoking blunders of that kind. They deal less in generaliza-
tions and syllogisms. They are practical and empirical.
They know by experience that if they do certain things certain
other things will follow, whether it be logical for them to
follow or not.

To this dissimilarity of temperament between the two
countries there was added also a difference, if not an actual

123

divergence, in positive interest. The internal economy of
France differs fundamentally from that of England, and is,
at least theoretically, much sounder. France is a self-con-
tained country. She can support her own people from the
products of her own soil, though there are certain raw materials
of industry which she is compelled to import from oversea
foreign sources. For England, on the contrary, with four-
fifths of her people dependent for their elementary food, their
actual bread and meat, on oversea supplies, a vast oversea
commerce is a first principle of existence. She feels more
than any nation in the world any obstruction in the channels
along which her manufactures flow out in order to pay for
her vast needful imports. No Power in the world suffered
so severely from the dislocation of the machinery of trade
which followed the Great War. France, with her natural
economic interchange between her own industrial and agri-
cultural centres, was far less affected in this respect. For
her the reconstruction of the European market was less
urgently necessary and she was more free to pursue more
purely political ends.

England, however, could not wait. The damage to her
trade was a more serious injury to her than the devastation
of the war area was to France. Trade revival, and all the
means leading to it, among these being the economic recon-
struction of Germany and Russia, determined her post-war
policy. It is not surprising, therefore, that the two countries,
though they had fought and bled side by side in the same
high cause, should have found it difficult to continue that
intimate accord into the days of peace. " Difficile est," wrote
Cicero in a letter of rare political wisdom to his brother Quintus,
" ea quae commodis, utilitate et prope natura diversa sunt,
voluntate conjungere." " It is hard to maintain any entente
between systems which differ in their material interest and
almost in their very nature and temperament."

This was the precise difficulty between England and France.
It did not imply that England was unfaithful to her war
comrade and consciously leaning towards new friendships

124 The Genoa Conference

with Russia and Germany. It was a radical difference in
positive interest and in psychological character which had
been suspended during the storm and stress of actual conflict,
but re-asserted its influence when the work of political, indus-
trial and commercial reconstruction in a war-broken world
had begun.

My own feeling is that though France has many excuses
for an extreme and intransigent policy, her attitude since
the Armistice has been in many ways short-sighted and
unwise and is likely, as the years advance, to revenge itself
upon her in renewed difficulty and danger. In his speech
'' Pro Marcello," if I may once more quote a favourite author,
Cicero remarks that Caesar, by the moderate spirit in which
he used his success over the Pompeian party, might be said
" victoriam ipsam vicisse." That cannot be fully affirmed
of France. She has not in this sense vanquished her own
victory, but has tended rather to fall to the level of the lower
motives and the less generous spirit which triumph so easily
engenders.* Even in the international sphere the Christian
precept " Love your enemies " may be the wisest policy,
as well as the highest ethics, though, let us always remember,
such an ideal is not easy for a people which has seen its hearths
and homes invaded four times in one hundred and twenty
years.

Throughout the whole of the Genoa Conference one was
always conscious of this antagonism between British and
French policy. We felt that we were not speaking the same
language or thinking the same thoughts as the French. With
the Italians and the British it was otherwise. The Italian
genius is far less hard and formal than that of their neigh-
bours. It is far more akin to the English and British, f and

* At a Mazzini celebration in London in June of this year Mr. Lloyd
George quoted a saying of the famous Italian statesman, one of the greatest
of the sons of Genoa, that " the morrow of the victory has more perils than
its eve."

t An explanation of this affinity I once heard suggested was that both
nations are maritime and have lived throughout their history on and by
the sea.

British and French Policy 125

these two peoples worked together throughout the Conference
with the most perfect sympathy and accord. More than
once Italy actually moderated British policy, which was
itself moderate in its whole spirit and purpose. I think most
of the nations assembled at Genoa must have been struck
with the liberal and broad-minded character of Italian
statesmanship.

It was hard to imagine how such a speech as this of Mr.
Lloyd George, delivered with an evidently sincere and pro-
found conviction, could be reconciled with the curious theory
that the British Prime Minister was simply electioneering at
Genoa, that the thirty-fuur nations had been called together
in order to provide a falling statesman with political capital
and thus enable him to retrieve his fortunes. If such a speech,
so inspired and so delivered, was indeed only an incident in
such a tactical plan, we obviously live in a more dreadful
world than we had imagined.

It was another symptom of the suspicious frame of mind
cherished in certain circles that the German admiration of
the speech tended in some way to its discredit. Dr. Rathenau
did indeed pay a warm tribute to it. He " would have given
anything to hear that speech." It seemed to be one of the
best Mr. Lloyd George had ever made. It was very far-
sighted. Mr. Lloyd George had said : " We want to be fair,
just and equitable." Dr. Rathenau believed that it was
with this thought that the British Prime Minister had launched
his non-aggression pact. He admired the long-sighted view
of the statesman who bore the greatest burden of responsibility
of any man in the world. So spake Dr. Rathenau, and it is
perhaps still possible for a man of culture to express his
appreciation of a noble and statesmanlike address without
any arriere pensee of a subtle and insidious kind. The less
generous comments on the speech were confined to certain
sections of opinion in England and France. Among at least
thirty-two nations of the world the address was interpreted
in the sense it was intended to bear and seemed to be
unanimously praised and approved.

126 The Genoa Conference

The Rapallo Treaty was meanwhile the chief subject of
interest, especially in France. Its significance was not under-
rated, and a statement was freely made that the treaty con-
tained clauses of a political and military kind, and that the
evil thing foreshadowed by Mr. Lloyd George in 1919 had
indeed come to pass. Opinion in France was at any rate
highly excited, as was evident from the unanimous resolutions
passed in the French Conseils-Gene'raux at the opening of
their Spring sessions. The question of reparations, with which
M. Poincare's speech was mostly concerned, did not fall
within the purview of the Genoa Conference. But as all
the signatories of the Treaty of Versailles were present in
Genoa it seemed reasonable that these should meet together
at once and take counsel on the important questions raised
by the French Prime Minister. This course was, therefore,
suggested by the British Delegation. But the French did
not approve. As usual, they pushed to its logical extreme
their perfectly correct opinion that Genoa had nothing to do
with reparations. The subject, therefore, must not be dis-
cussed in the city where the Conference was being held,
even though the two bodies were kept entirely distinct. M.
Poincare would certainly not come to Genoa for the purpose,
though it was understood he might possibly come to Nice !
The first suggestion of the French was that the question should
be referred to the Council of Ambassadors, but they settled
down finally on the decision that the subject should be left
over until after May 31, when the German default, if any,
would be known, and the situation might then be considered
in the Reparations Commission.

M. Barthou* at this juncture intimated that he must go
to Paris to consult his Government, but his departure was
repeatedly delayed. Mr. Lloyd George reminded him that
this was the second time the head of a French delegation

* It seemed to many in the Conference that the French Delegation at
Genoa was much more inclined to concession and moderation than the
Government which controlled its policy from Paris. Certainly M. Barthou
was always on excellent terms personally with Mr. Lloyd George.

British and French Policy 127

had proposed to leave an international conference. On the
first occasion, when M. Briand had suddenly departed from
Cannes, the result had not been encouraging. These shrewd
sallies of the British Prime Minister were not always appre-
ciated by gentlemen in whom a sense of humour, or at any
rate a sense of Lloyd-Georgian humour, was perhaps not
highly developed. On such occasions Mr. Lloyd George
would generally set matters right by a little tribute or a
compliment. So now he went on to praise M. Barthou's
conciliatory efforts and his evident desire to contribute to
the smooth working of the Conference. In the end M. Barthou
left Genoa for Paris on the morning of May 2nd.

Poland was the country most directly and imminently
affected by the Rapallo Agreement. This aspect of the question
became manifest in a lively exchange of letters at this time
between the Russian and Polish Delegations. It must be
explained that before going to Genoa the Poles had concluded
on March 30th at Riga a treaty with the Bolshevists, Es-
thonians and Letts concerning economic and commercial
reconstruction in Eastern Europe. In this the Poles had
agreed to the principle that this reconstruction would be
aided by the de jure recognition of the Bolshevist regime.
The Poles also undertook to support the limitation of arma-
ments and intimated their intention of promoting at Genoa
the objects of the Riga Agreement.

It will be remembered, however, that M. Skirmunt, the
Polish Foreign Minister and head of the Polish Deputation,
signed the two letters of protest against the Russo-German
Treaty. This action prompted M. Tchitcherin to write a
letter to M. Skirmunt in which he made some shrewd comments
on the Polish proceeding. He pointed out that the Riga
Treaty settled Russo-Polish questions more comprehensively
and definitely than the Rapallo Treaty settled Russo-German
questions. M. Skirmunt's conduct was " strange and in-
comprehensible " inasmuch as, though he had recognized de
jure the Bolshevist Government, he now questioned the
right of Russia to conclude treaties with other States. Such

128 The Genoa Conference

conduct was " an outrage against the sovereign rights of
Russia " and an infraction of a treaty of March 8th, 1921, also
concluded at Riga and ratified by the Polish Diet, and a
still more flagrant violation of the Agreement of March,
1922.

Moreover (added Tchitcherin) the circumstance that the
States signatory of the reply to the German Note — among
which States Poland alone belongs neither to the Big nor the
Little Entente, but is allied to Russia in virtue of normal
treaty relations — reserved their Governments' right not to
recognize this or that Article of the Russo-German Treaty
creates an unheard-of precedent entitling any third Power
to annul a treaty concluded between two other Powers. This
precedent (concluded M. Tchitcherin) would give the Bol-
shevists the absolute right not to recognize any treaties between
Poland and other Powers if they contained displeasing clauses.
The Bolshevist Government was not at all disposed to pursue
the path indicated by the step Poland had taken, and " de-
clares categorically that in no case will it permit that recog-
nition of treaties concluded by it should depend upon third
Powers."

This incisive Note, which bears some marks of M. Rakowski's
authorship, provoked from M. Skirmunt a polite but rather
cloudy and prolonged reply.

He declined to admit the right of the Bolshevist Govern-
ment to intervene between Poland and the other States,
and declared that the recognition de jure of the Bolshevist
Government could only be regarded as a move towards the
end of promoting the economic reconstruction of Central and
Eastern Europe. The participation of Poland in the delibera-
tions of the Conference upon Russian affairs was in no way
incompatible with the Riga Peace Treaty of March, 1921.
Nor was there any analogy between such Polish participation
and the absence of Germany from the discussion of Russian
affairs, an action amply explained in the recent correspondence
with the German Delegation. Polish adhesion to this corre-
spondence could not be interpreted as affecting Russian sove-

I a

British and French Policy 129

reignty or depriving Russia of the right to conclude treaties
with other States.

The Bolshevists' accusations were, therefore, baseless, and
could not affect Polish participation in a collective measure
designed to safeguard the Treaty rights of a group of States —
to which Poland belonged — and their relations with a third
State. This was a question upon which Russia had not been
asked for her opinion.

French opinion, as I have pointed out, was not disposed
to regard the Rapallo incident as closed. It not unnaturally
regarded the agreement as directed against France, and there
was much talk about clauses of a military and political char-
acter which had not been disclosed at Genoa. The treaty
seemed too 'one-sided, too favourable to Russia, to be complete
as given to the world. What purported to be the military and
political terms were afterwards published in the British Press.
These assumptions were combated at the end of the month
by a letter written by M. Tchitcherin to M. Barthou, of which
a copy was forwarded to Mr. Lloyd George :

" April soth, 1922.
" To Mr. Lloyd George.

" Sir, — I consider it my duty to forward you the copy
herewith enclosed of a letter which I have sent to-day
to M. Barthou.

" I have the honour to be, Sir,
"Your most obedient servant,
(Signed) " GEORGE TCHITCHERIN."

" Genoa,

" April 30th, 1922.

" Sir, — In the comments in the French Press, as well as
in the declarations of the heads of the French Govern-
ment, the agreement between Russia and Germany, which
was negotiated several months ago at Berlin and has been
signed at Rapallo, is interpreted as an act directed
against the interests of France. The assumption has been

9

130 The Genoa Conference

repeatedly expressed that the Treaty of Rapallo has
been accompanied by secret clauses of a military and
political nature, which conceal aggressive intentions on
the part of Russia towards France or her Allies.

" In view of the fact that in spite of the repeated
official denials of the Russian and German Delegations,
and the declaration of the German Chancellor to the
Press, suspicions concerning the true significance and
character of the Rapallo Agreement continue to disturb
public opinion and official circles in France, the Russian
Delegation believes it necessary, in the interests of truth
and in order to dissipate any doubts which might have
arisen as to the peaceful policy of the Russian Govern-
ment, to address this note to you.

" The Russian Delegation declares in the most cate-
gorical manner, in confirmation of what it has stated
semi-officially, that the Rapallo Agreement contains no
secret military or political clause and is accompanied by
no such clause, also that the Russian Government is
not engaged in any act or action whatever directed against
the interests of the French or any other nation.

" The Rapallo Agreement has only contemplated the
liquidation of questions pending between two States who
had been at war, both of whom feel the need to re-estab-
lish peaceful relations in their own interests and in the
interests of the whole of humanity. Far from being
directed against France or any other Power, the intention
of the Russian Government is that the above-mentioned
agreement should but be the commencement of a series
of individual agreements which, in the opinion of the
Russian Delegation, should complete the general agree-
ment towards which the Powers assembled at Genoa
are aiming. These agreements should serve as a basis
for peace and equilibrium in the world.

" So far as France in particular is concerned, the
Russian Government considers that there are many
points of contact between the interests of the two coun-

British and French Policy 131

tries which will facilitate agreement on all the questions
at issue between them.

" In this respect the policy of Russia has not varied,
in spite of the hostile attitude which France has deemed
it necessary to maintain towards her for more than four
years. The Russian Government cannot conceal from
the French Government that the latter's hostile policy
has created violent resentment against France in the
public opinion of Russia, and that, apart from this policy,
no reason would appear to exist why the most friendly
relations should not be established between Russia and
France and her Allies. The Russian Government is also
convinced that a change in the attitude of France is not
only necessary but advisable in the interests of France
and Russia, the populations in the East of Europe and the
the economic recovery of the world.

" Believe me, Sir, that this letter is only dictated by a
sincere desire to dissipate any misunderstanding which
might have impeded the normal progress of the Genoa

Conference.

" I have the honour to be, etc., etc.,

(Signed) " TCHITCHERIN."

M. Barthou turned away this anger by the softest of replies
dated May ist :

" J'ai communique ce matin a la reunion officieuse de
la premiere sous-commission, en raison de certaines
dispositions generates qui interessent toutes les puis-
sances, la lettre que vous m'avez fait remettre hier soir.

" D'un autre cote, j'en ai fait tout de suite transmettre
te'le'graphiquement le texte au president du conseil des
ministres fran?ais.

" Sans mettre en doute la sincerite des intentions qui
ont dicte la lettre de la delegation russe, je dois relever le
passage qui attribue a la France une attitude d'hostilit6
envers la Russie. La France a, tout au contraire, conserve
pour la nation russe, qui fut sa loyale alliee de guerre
pendant trois ans, les sentiments d'une vieille amitie."

9*

132 The Genoa Conference

M. Barthou returned from Paris on May 6th, and in the
afternoon of that day had a conversation with Mr. Lloyd
George. His absence and return are also a part of the story
of the general Russian question before the Conference, and
we shall refer to them again in that connection. But one of
M. Barthou's objects in visiting Paris was to consult on the
questions opened by the Russo-German Treaty. In his inter-
view with Mr. Lloyd George he had important things to say
about the general Russian questions before the Conference, of
which I shall speak later. But he referred also to the Russo-
German Treaty, over which he said he had found opinion in
Paris very much disturbed. Mr. Lloyd George corrected a
statement he had noticed in the French papers that he had
proposed a meeting of the Supreme Council in the ordinary
acceptation of that term. All he had suggested, jointly with
the Italian Government, was that conversations should be held
among the Allied signatories of the Treaty of Versailles, as
these were nearly all at Genoa. M. Barthou replied that
he fully understood the nature of Mr. Lloyd George's sugges-
tion, but, as he had already informed Signor Schanzer, the
French Government were not in favour of having such
conversations until after May 3ist.

M. Barthou also reaffirmed the French intention to act in
the closest association with Belgium with regard to the
memorandum to Russia, especially the clause relating to
private property, refusing to agree to it until Belgium did the
same. To this we shall return in a subsequent chapter
dealing with the proceedings in the Political or Russian
Commission.

CHAPTER IX

CYCLONE AND ANTI-CYCLONE

FROM this interview between the chief British and
French delegates sprang a storm of first-class severity.
The rumour of a very startling report of what had passed
between the two statesmen reached Genoa from many
sources, including telegraphic messages, press and private,
from England. What the report in question was may best be
gathered from the great British journal in which it was
most definitely and deliberately given. The Times was at
this period strongly hostile to the British Government and
hostile in a curiously personal way to Mr. Lloyd George.
It had been the chief exponent of the theory that the Genoa
Conference was simply a device to revive a statesman's
drooping fortunes. On this personal and on broader political
grounds it had opposed the holding of the Conference, and
the general impression, not unconfirmed by the messages of
its special correspondent and editor, Mr. Wickham Steed,
was that the Times earnestly desired the failure of the Con-
ference and welcomed any influence or incident which tended
to produce that result. At any rate the only success Printiijg
House Square hoped for the Conference was the negative one
that it might not end in such a " catastrophe " as the journal
anticipated. The policy and predilection of the Times were
symbolized by the residence of its correspondent in the
actual hotel* reserved for the French Delegation.

On May 8th, in a lengthy postscript to that day's message,
Mr. Wickham Steed wrote :

" I find that I seriously underestimated the facts when,

* The Hotel Savoia.
133

134 The Genoa Conference

in my earlier message, I suggested that yesterday's inter-
view between Mr. Lloyd George and M. Barthou was
not entirely harmonious. According to reliable informa-
tion the British Prime Minister spoke severely. What-
ever allowances may be made for his disappointment at
the failure of the Conference hitherto to give him the
results for which he professed to hope, the fact remains
that his language yesterday was in accord with the most
extreme interpretations of his policy that his partisans
have advanced.

" In substance he told M. Barthou that the entente
between Great Britain and France was at an end. Great
Britain considered herself henceforth free to seek and
cultivate other friendships. His advisers had long been
urging him to make an agreement with Germany, even
at the cost of abandoning British claims to reparations.
France had made her choice between British friendship
and Belgian friendship. She had opted for Belgium,
although the help she had received from Belgium was not
comparable to the help she had received from Great
Britain. The British Government felt very deeply the
conduct of France.

" Henceforth France might stand alone with Belgium,
and see what advantage that would bring her. He (Mr.
Lloyd George) knew that what had happened was not
M. Barthou 's fault. M. Barthou had done his best to be
conciliatory, but he had had no freedom of action. British
opinion was hostile to France, and his (Mr. Lloyd George's)
advisers, especially Lord Birkenhead, the Lord Chancellor
of England, had been constantly advising him to break
with France. Letters from all parts of the country gave
him the same advice. In fact, he, the Prime Minister,
was almost the only friend France had in England. But
now he must look in another direction.

" M. Barthou seems to have been overwhelmed by
the Prime Minister's vehemence and to have essayed a
soft answer in the hope that it might turn away Mr.

Cyclone and Anti- cyclone 135

Lloyd George's wrath. To-day, however, M. Barthou
received the representatives of the British Press and
made a somewhat more adequate reply to them."
The correspondent then goes on to report the substance of
this official conversation with the British Press :

" M. Barthou stated that France had done her utmost
to collaborate loyally in the work of the Conference.
She had made great concessions, the extent of which
would only be revealed when the history of the Con-
ference was written. The French Delegation might have
objected to the semi-official conversations with the
Bolshevists at Mr. Lloyd George's villa, since France
had come here for a conference, not for private negotia-
tions. He had taken part in the conversations on his
own responsibility. Had France not really desired the
success of the Conference, she would have broken it off
when the Germans and Bolshevists stabbed it in the
back.

" M. Barthou then referred in some detail to his attitude
during the drafting of the concerted document and ex-
plained that he had done his utmost to maintain harmony.
But in Paris he found great animation in the Press and in
public opinion. The Foreign Affairs Commission of the
Chamber and of the Senate had considered the Belgian
protest on the subject of private property entirely
justified. The Government had instructed the French
Delegation to support Belgium on a question of principle,
not on a question of persons.

" It should not be said that France had chosen between
two friends. She had acted on a question of principle.
There was no question of choosing between British and
Belgian friendship. The Belgian attitude had been
heroic at the beginning of the war and had earned the
admiration of the whole world. But this did not lessen
French admiration towards Great Britain and the British
Dominions.

" M. Barthou added that the revolutionary change

186 The Genoa Conference

made when the British introduced conscription, and

allowed their armies to be commanded by a Frenchman,

was one of the finest things recorded in history. France

believed that Belgium now stood closer to the truth

than England. She had therefore sided with Belgium,

but not with Belgium against England. He must say

clearly that France wishes to maintain the Alliance. He

spoke as a Minister, and therefore with a full sense of

his responsibility. France had acted on a question of

public law. Could that mean that England and France

were not to follow the path of law together ? It was

possible that the Bolshevists would place them again

together by refusing the concerted document. The

Bolshevists would have to speak clearly, and say Yes or

No without delay. If their reply was No, there could

be no question of the Non- Aggression Pact either."

This statement by the chief French Delegate might seem

to give colour to the report of the Lloyd George-Barthou

conversation, and was probably quoted with the object of

supporting that account. The report may, indeed, have been

built on the statement. There is no doubt, however, that it

was a complete fabrication, though who the original artist

was remains, as usual in these cases, a mystery.

It was at this point (May 8th) that Mr. Lloyd George paid
the Anglo-American journalists his first visit in the University.
That morning an anxious-minded Scandinavian journalist
had expressed to me her fear that the strain of the Conference
might be proving too much for the British Prime Minister.
We were, indeed, en pleitie crise, what with this excitement
over the Barthou interview and the immediate expectation
of the Russian reply to the Memorandum. There were many
rumours abroad, and in anxious minds, such as that of my
Norse friend, much foreboding. I gave this lady, who was
the correspondent of the Dagbladet, what consolation I could.
It was probable that, as Mr. Lloyd George had endured the
strain of the war, he would perhaps prove equal to the strain
of the peace. But she was only half assured.

Cyclone and Ant i- cyclone 137

When Mr. Lloyd George joined us in the afternoon I
recalled that conversation with amusement. The Prime
Minister, attired in an easy grey suit and a soft shirt and
collar, was the picture of health and strength and the joie
de vivre. The " weary Titan " bore his burden lightly as a
flower. He pronounced no rhetorical speech, but sat down
in a friendly and homely way, and invited questions, which,
I must add, he quickly got. It was a merry half-hour, for
Mr. Lloyd George was in excellent form. He told us about
his recent talks with Tchitcherin and Barthou, protesting
against the misreport of the latter. It was untrue from
beginning to end — the " insane " production of those persons
who wanted the Conference to fail. It was also a " wicked "
fabrication, because it tended to embitter the relations between
two friendly and allied countries. He (Mr. Lloyd George)
had never said that it was all over with the Entente, and,
as regards the allusion to Lord Birkenhead, the Lord Chan-
cellor's name had never been mentioned from the beginning
to the end of the interview. A quite fair and accurate official
account of the interview had been dispatched by the French
Delegation to their own Government. The quietude of the
Prime Minister's denials, the absence of any over-emphatic
protest, corroborated his words, and left no doubt in any
reasonable mind.

" Mr. Prime Minister " answered all questions, asked in
both the English and the American languages, with much
patience and humour. And, throughout, the buoyancy of the
great statesman's temperament was manifest. If the Russian
answer was of a certain character the next day, he was asked,
would he turn down the idea of — I did not catch the exact
point? " I never turn down ideas," gently replied Mr. Lloyd
George.

To one who repeated a question already asked and
answered, the Prime Minister said he was afraid the ques-
tioner had not heard his last answer. He would not answer
the question again, he slily added, lest his second reply should
be regarded as inconsistent with the first. To many inquiries

138 The Genoa Conference

about his relations with M. Barthou and the French, he
replied, with invariable cheerfulness and confidence : " We
have got over so many difficulties in the past that a few more
will not matter. Besides," he remarked, with reference to
political as well as physical meteorology, " the weather is
^proving." All this in the softest tones of that musical
voice which is ?o familiar in senate and assembly of the
homeland.

It was, indeed, a very pleasant aspect of the great statesman,
upon whom more than any other the hope of the world was in
these days fixed, we had before us that delicious afternoon.
I think everyone present felt the charm of a singularly happy
and wholesome personality. We could note almost the " pulse
of the machine " that was guiding, if not controlling, the
destinies of the world. To many of us Lloyd George had
been for many years a name and nothing more. We could
now mark or re-mark at close hand the sunny and invincible
optimism of the man, the constant play of humour neutralizing
everything acid and acrid, the perfect freedom from pedantry
and fanaticism and all those moods which engender discord
and oppression and cruelty, the spiritual insight and know-
ledge which is better than academic erudition, the happy
embodiment of those qualities which I believe Dean Swift,
before Matthew Arnold, summed up as " sweetness and
light."

I would not have the reader think that there was anything
frivolous or heartless in Mr. Lloyd George's cheerfulness in
ipso discrimine re-rum. He was conscious enough, none more
so, of the fatefulness of the hour. Under the summer light-
ning of his wit was the serious purpose, the inspiration of a
great idea. Mr. Lloyd George's personal popularity with the
nations represented at Genoa was very great. Even among
the French one noticed a desire to push concession to the
farthest limit out of a personal liking for the British Prime
Minister. An American journalist frankly admitted that
there was one thing which New England envied Old England,
and that was " your Mr. Lloyd George." I dwell on these

Cyclone and Anti- cyclone 139

circumstances because I do not think that the people of this
country have fully realized what an advantage they enjoyed
in being thus happily represented in the world's councils,
and how high the name of England stood at this time among
the nations, and especially among all liberal-minded men
and women throughout the world.

The coup de grace was given to the garbled report by the
letter which the British Prime Minister wrote to M. Barthou
and the reply of the French Minister. These letters were
read by Mr. Chamberlain in the House of Commons. The
former ran :

" My dear Barthou, — I am informed that there
appeared in the English newspapers to-day [Monday]*
a statement regarding our conversation on Saturday,
which attributes to me a declaration to the effect that
the Entente between France and Britain is at an end,
and that my advisers were pressing me to come to an
understanding with Germany. I have already asked
Mr. Chamberlain, who is Acting Prime Minister in my
absence, to contradict this malicious invention in Parlia-
ment this afternoon, and will be much obliged if you, on
your side, will also contradict both statements. I request
this because, as you know, I value Franco-British co-
operation too highly to tolerate public misstatements
regarding the official conversation on that subject at a
moment of great importance in the relations of our two
countries. I was a strong partisan of the Entente
between France and Britain long before the war, and
to me, as to every Englishman, that friendship means
more since it was consecrated by common sacrifices.
Hence my great anxiety that nothing should happen to
divide the opinion of our two great democracies, upon
whose partnership the peace of Europe so largely
depends.

"Believe me, yours sincerely."

* May 8th.

140 The Genoa Conference

M. Barthou's reply was :

" My dear Mr. Lloyd George, — You appeal to my
testimony regarding the conversation which we had
together on Saturday afternoon, and which has aroused
so much comment. Here is my reply : You did not say
that the Entente between Britain and France was at
an end, nor did you say that your advisers were pressing
you to come to an understanding with Germany. You
spoke to me of the difficulties through which the rela-
tions of our two countries were passing, but you did not
pronounce one word which could be interpreted as
expressing the intention to break the friendship which
unites us, and I retain all my confidence in our essential
union."

Such was the conclusion of an incident which caused an
immense perturbation in Genoa and in Europe generally, and
produced something like a panic on more than one Continental
Bourse. It is useless to speculate on the origin of these
sensational rumours. They appear to be interesting examples
of spontaneous generation.

The air of the Italian city was filled with such floating and
intangible films. At the daily conferences in the University
the latest rumour was usually reported and amusingly dis-
cussed. The simplest incidents became the subjects of the
most credulous suspicion. About the time of the fabricated
report Mr. Lloyd George received a visit from M. Tchitcherin.
The theory of a new orientation of British policy was sup-
posed to be confirmed by this and by a similar visit of the
German Delegates. As Mr. Lloyd George told the journalists,
the visit of the Bolshevik leader had a very simple and obvious
purpose. He called to obtain a little further information on
certain points in the famous Memorandum.

Such atmospheric conditions are perhaps inevitable on
these occasions, when so many conflicting interests are in-
volved. But to fasten on any of these nebulous hypotheses

Cyclone and An ti- cyclone 141

and give them body and form for political reasons and without
the strongest evidence of their truth was to assume a very
serious responsibility. The position of a British representative,
whose political base is liable to persistent and insidious
attack, becomes almost intolerable. It is possible that the
Genoa Conference ought not to have been held. At any
rate, that was a legitimate, though perhaps a not very well-
founded, position to take up before the Conference assembled.
But to make every effort and employ every means to embarrass
the British representatives and frustrate the Conference while
it was sitting was surely morally unjustifiable and, if successful,
might have issued in the most serious and disastrous con-
sequences. For a conference to be proposed and not to meet
may be harmless enough. But that thirty-four nations
should assemble with a serious purpose and at one of the
most critical periods in human history, and then separate
in disappointment and frustration might have produced the
worst reactions on the conditions of a world already verging
on dissolution and despair. Not the least of the British
Prime Minister's titles to the gratitude and respect of the
nations is that he fought the enemy in front, and the much
worse and more insidious enemy behind, with an unfailing
patience and courage. It was these qualities which were
to save the Conference in its closing days, when a little less
confidence and a little less patience in the British statesman
might have resulted in a complete frustration of the six weeks'
work in Genoa and the consequential evils to the world of
such a disaster.

CHAPTER X

THE PALAZZO DI SAN GIORGIO AGAIN

UNDER the overshadowing interest of the Russo-German
Treaty and the Russian question in general the formal
commissions dealing with the main objects of the Conference
had been quietly accomplishing their tasks. The Second or
Financial Commission, presided over by Sir Robert Home,
Chancellor of the Exchequer, and after his departure to
England on Budget business by Sir Laming Worthington-
Evans, Secretary of State for War, had made very rapid
progress. It will be remembered that this Commission was
divided into three sub-commissions, dealing respectively with
Currency, Credit and Exchange. On the first of these, in
addition to Sir Robert Home, who was President, sat Sir
B. Blackett and Sir C. Addis, with other British assistants.
Britain was represented by the War Minister on the second
and again by Sir Robert Home himself on the third sub-
commission.

General tributes were paid to Sir Robert Home's genial
but firm efficiency as Chairman of this Commission. It was
largely owing to his influence that the work was carried out
in so business-like a fashion. He inspired the greatest confi-
dence and his nomination of the Committee of Experts was
literally accepted without any protest or jealousy. Never
before has there been such a concentration of financial experts
in one place as at this time in Genoa. By " experts " is meant
not simply financial writers or professors but men of practical
business experience in these departments. For example,
the various central banks were represented by governors or
deputy-governors in M. Vissering of Holland, Signor Stringher

142

The Palazzo di San Giorgio again 143

of Italy, Herr Havenstein of Germany, M. Picard of France.
Two directors of the Bank of England, Mr. Peacock and Sir
Charles Addis were also present.

Then again many of the great merchant bankers and joint-
stock institutions sent their chief s — Mr. Henry Bell, of Lloyd's;
M. ter Meulen, of Hope's, the great Amsterdam house which
was agent for the British Treasury in the wars of Napoleon
and again in the late war ; M. Wallenberg, of the Stockholms
Enskilda Bank ; M. Gluckstadt, of the Landmandsbank of
Copenhagen ; and Herr Welchior, from the Hamburg firm of
Warburg, who of all Germany's financiers commands the
widest international respect for integrity and intellect. Pro-
fessor Cassel, of Stockholm ; Mr. Hawtrey, of the British
Treasury ; Mr. Brand, of Lazard's ; and Sir Henry Strakosch,
of whom the last two were the nominees of General Smuts,
represent the pick of writers on positive finance.

From such a galaxy of wisdom and ripe experience it was
possible to select a committee of financial supermen. It was
not chosen according to countries but nominated from the
whole body of European experts, regardless of nationality.
It consisted of Messrs. Avenol, Bianchini, Vissering, Cassel,
Cattier, Havenstein, Dubois, Pospisil, Brand and Strakosch,
all under the presidency of Sir Basil Blackett.

The Fourth or Transport Commission had likewise speeded
up and finished its labours neck to neck with the Financial.
This had also been divided into three sub-commissions,
dealing with Organization, Railways and Waterways. M.
Theunis, Prime Minister of Belgium, or in his absence M.
Caspar, Belgian Foreign Minister, presided over the Com-
mission. The names of the various British members will
be found in the full list of the Commissions.*

To return to the Report of the Financial Commission. That
document presented no sensational surprises and may have
disappointed those who desired sweeping changes and the
waving of magic wands. As Sir Robert Home remarked,
there are certain fundamental laws from which there is no

* See Chapter IV.

144 The Genoa Conference

getting away, and which must form the basis of all sound
discussion and conclusion. Nevertheless, the Report was
not simply a new edition of that of the International Financial
Conference held at Brussels in September, 1920. For example,
there was no suggestion at Brussels, such as was now made,
of a new gold parity. Original also to the Genoa document
is the bold statement that " a considerable service will be
rendered both to its own internal economy and to the cause
of European recovery by that country which, after reaching
comparative stability in its currency at a point so far below
the old parity as to make return to it a long and painful
process, first decides boldly to set the example of securing
immediate stability in terms of gold by fixing a new gold
par at or near the figures at which comparative stability
has been attained." The Genoa Financial Report* marks
an important stage in the advance towards that stabilization
of the exchanges without which it is impossible to set the
wheels of commerce once again in motion.

The last Resolution (No. 19), which recommends the establish-
ment of an International Corporation, with national corpora-
tions affiliated to it, in order to render financial and technical
facilities in the reconstruction of Europe, carried out one of
the resolutions passed at Cannes. Sir Laming Worthington-
Evans was able to announce that twelve countries had pledged
themselves (if their governments approved) to join the scheme.
Twenty millions sterling seems a small enough sum for this
purpose. But, as the British War Minister said, behind the
national corporations stand the vast resources of the various
countries, from which undertakings approved and supported
by the Central Corporation can be financed. A subscription
of half a million entitles to a seat on the Board of that body,
but there will also be a smaller executive committee.

As regards the Report of the Fourth or Transport Com-
mission, the debates were conditioned in some degree by the
Barcelona conventions of April 20, 1921, regarding " Freedom
of Transit and the Regime of Navigable Waterways of Inter-

* See Appendix V.

The Palazzo di San Giorgio again 145

national Concern ; " and also by the agreements for the
regulation of international railway traffic concluded at
Porto Rosa on November 23, 1921. In connection with the
former of these rather formidable documents it may be worth
mentioning that the only State which ratified the railway
regulations of the Barcelona Report was Albania, which does
not possess a single mile of railway line.

The second plenary session of the Conference was held
in the Palazzo San Giorgio at 10 a.m. on May 3rd, in order
to consider and approve the Reports of the Financial and
Transport Commissions. This event, which greatly resembled
the inaugural meeting was, naturally, not so interesting. We
were all accustomed by this time to the sight of the various
delegations. Even a live Bolshevist no longer excited our
curiosity. Moreover, the subject was not exactly of a madrigal
character. A generation which has had to comprehend the
science of relativity and the problems of post-war finance
may be said to have had intellectual exercise. The questions
of currency, credit and international exchange do not lend
themselves readily to humorous treatment. Indeed, by the
time we had listened to half the speeches and their translations
the time began to drag rather heavily. Mr. Lloyd George,
who was present but took no part in the proceedings, seems
to have felt the general ennui, for he passed a scrap of paper
to a friend of mine, who carefully preserves it, with the de-
spairing question, " Are we never going to have a relieving
touch of humour ? "

The speeches, however, were not uninteresting, and they
will certainly be most valuable to those in future times who
wish to understand the complicated problems which faced the
world after the great European War. They contain a good
deal of information which the non-technical reader may also
find acceptable. The official report of the meeting was as
follows :*

* The Reports themselves will be found in Appendixes V. and VI.

10

146 The Genoa Conference

INTERNATIONAL ECONOMIC CONFERENCE
OF GENOA

SECOND PLENARY SESSION
PROVISIONAL VERBATIM REPORT

May yd, 1922

The President (speaking in Italian) :

"With reference to Article 12 of the Rules of Procedure
of the Conference, I declare at the beginning of the meeting
that, as no Delegation has submitted any alterations to the
Minutes of the First Plenary Session, they are considered
as finally adopted.

" Gentlemen, — The Conference decided on the occasion of
its first Plenary Session to begin its labours at once, and to
appoint its Commissions without delay. As you know,
three Commissions, mainly of a technical character, were
formed to deal with the technical matters placed on the agenda
adopted at Cannes. The second Commission of the Con-
ference was entrusted with financial questions ; economic
questions were assigned to the third, while the fourth was to
deal with transport.

" Of these three Commissions two have already completed
their labours and have laid their report before you : the
Financial Commission and the Transport Commission. It is
on these reports, as well as on the draft resolutions which they
contain, that the Conference is called upon to deliberate to-day.

" It is not my duty, gentlemen, to state again here the
main lines of the conclusions at which these Commissions have
arrived. You all know them. The relevant documents are
before you. I would merely like, in a few words, to explain
the spirit which has inspired their labours, and the share in
the general task of the Conference which their work represents.

" Tke agenda of the Financial Commission contained
problems which keenly, even passionately, interest public
opinion. The need of a great number of countries for credits,

The Palazzo di San Giorgio again 147

the exchange crisis, and the fluctuations in currencies, are
the most obvious symptoms of the general crisis from which
Europe is suffering. The urgent need of finding a remedy
for this crisis was the primary motive for summoning this
Conference.

" It seems to me that the Financial Commission, while
considering seriatim the different questions before it, in so
far as their solution depended on the solution of the great
political problems which were outside its terms of reference,
wisely contented itself with setting forth the measures which,
if steadily applied, will allow of slow but real progress being
made.

" Availing itself of the resolutions adopted by the Brussels
Financial Conference, which in many points serve as basis
for its own work, the Commission considered consecutively
the problems of currency, exchange and credits.

;< The Transport Commission had to consider a series of
most important and urgent problems. Pending the re-
establishment of transport facilities, at least as favourable
as those which existed before the war, Europe cannot be
expected to overcome the present crisis.

" Material causes, and, if I may say so, causes of a political
nature also, may prevent this re-establishment. It has,
therefore, appeared essential to the Transport Commission
to suggest methods for gradually restoring the means of
transport in Europe and, at the same time, to lay down
principles of international control which, without infringing
the sovereign rights of States, may avoid disagreements which
might interfere with the good organization of international
transport.

" I am not called upon to enter into details which can
be better explained by the Presidents of the Commissions.
So far as I am concerned, I do not hesitate to say, gentlemen,
that at the present stage of our labours we can warmly con-
gratulate ourselves on the fact that our task has been brought
so speedily to a successful conclusion by two of our Technical
Commissions. Within a few weeks they have succeeded on

10*

148 The Genoa Conference

the problems referred to them in reaching an agreement,
embodied in carefully drafted resolutions.

" They have thereby shown that in spite of difficulties of
another kind, the men of good-will of all nations who are
assembled here were ready to come to an understanding in
all good faith. That spirit of agreement is a good omen
for the rest of our work and for the solution of the political
problems to which we are devoting all our efforts, with a
view to the re-establishment of mutual confidence and of
fruitful co-operation between our various countries.

' The Conference is therefore achieving the objects it had
in view. An assembly which deals with the gravest inter-
national questions cannot accomplish its purpose unless all
its members are resolutely determined to create an atmo-
sphere of conciliation in which the interests of the several
nations may be studied in a spirit of absolute equity and
justice.

" These conditions have been realized at the present Con-
ference ; this is why the attention of the world is fixed on
it with ever-growing hope and confidence. We must avail
ourselves to the full of this confidence. Our assembly should
teach a great lesson and set a bright example to all peoples.
The rapidity and success of the work of reconstruction which
all desire to see carried out will largely depend on the serenity
and spirit of harmony which we display, and which will show
that we are prepared to overcome the inevitable difficulties
involved in the problems before us.

" The work so far accomplished clearly shows that the
Conference in its deliberations has been guided by a common
purpose and controlled by a self-imposed discipline.

" We may therefore proceed with our labours with confi-
dence and serenity.

" I now call upon the President of the Financial Com-
mission."

Sir Laming Worthington-Evans (British Empire) (speaking
in English) :

" Mr. President, — I beg to move the adoption of the Report

The Palazzo di San Giorgio again 149

of the Financial Commission appointed by this great Con-
ference at its first Plenary Session.

" The Report itself, on the first page of the document before
you, recites the activities of the various Sub-Commissions
and Committees of Experts set up to consider in detail the
various important questions with which the Financial Com-
mission has had to deal.

" The resolutions come to by the Commission, which this
Conference is asked to adopt, constitute a financial code
not less important to the world to-day than was the civil
code of Justinian.

" The Institutes of Justinian have been the basis of the
jurisprudence of not merely a large part of Europe but of the
world itself.

" Here at Genoa there have been assembled experts in
finance and economics, each known in his own country as
the leading authority upon the subjects with which we are
dealing, and their combined wisdom after a full review of
the conditions of Europe and after a full discussion of what
in the circumstances is possible, has resulted in agreement
upon a series of resolutions which will be a guide, and I
hope a code, to be followed and observed in the same way
as the laws due to the learning of Justinian.

" Italy laid the foundation of the civil law upon which
Napoleon built. May we not also hope that in Italy again,
upon the code laid down at Genoa, the financial and
economic reconstruction of Europe may be founded and
pursued ?

" No town could have been better chosen ; no place
could have been better selected in Genoa than the Palace
of San Giorgio, where the first International Bank was
founded ; where the instruments of credit, bills of exchange,
and cheques, were first invented — for the restatement in
authoritative form of those principles upon which the credit
of Europe can be restored, and the free interchange of the
products of skill and labour can be made available regardless
of national boundaries.

150 The Genoa Conference

" I venture to think that the Financial Commission has
accomplished a great work.

" What was the problem before it ? To find a remedy
for the derangement of money and credit, to which the in-
terruption of commerce, the depression of trade and the
widespread unemployment from which the world is suffering
are in great part due.

" It was necessary to recognize from the beginning that
the malady was too deep-seated and had gained too great
a hold for any immediate or simple cure to be possible. The
Resolutions which have been adopted do not pretend to
provide such a cure. They do no more than point the way
for a process of gradual recuperation.

" Nevertheless they mark a stage.

"It is instructive to compare them with the resolutions
passed at the Financial Conference held at Brussels in 1920.
At that Conference much sound doctrine was enunciated
and was impressed on public opinion with all the authority
of the assembled experts of Europe. Some of the resolutions
we have passed echo those of Brussels, but even though
a reiteration of sound principles may again have value, the
world would have been disappointed, and rightly so, if Genoa
had produced nothing but an echo. Genoa once again has
sounded a note of its own.

" If you will allow me I will endeavour to explain the
main features of the resolutions proposed.

" The evils we have set out to examine are the fluctuations
in internal currencies, the consequent oscillations in external
exchange and resulting obstacles to international credits.

" The three subjects — currency, exchange and credits
— are so dependent the one upon the other that the proposed
remedies are rightly contained in one report.

" Unless the currency of a country is reasonably stable,
by which I mean, is freed from violent and frequent rises
and falls, it is impossible to measure either the value of labour
or its products, and it is consequently impossible to exchange
those products for the products of other countries, however

The Palazzo di San Giorgio again 151

much they may require them, upon any business basis except
subject to the strict limitations of a system of barter.

" Business between such countries ceases to be business
and becomes a speculation or even a gamble.

" The report advises that gold should be adopted as the
common standard, but it is recognized that this is not imme-
diately possible and the advice is given that the establishment
of a gold standard should be declared to be the ultimate object,
and that a programme should be agreed by which this object
should be achieved.

" The programme is set out in some detail in the resolutions.

" First the obstacles are frankly dealt with, and then the
means of economizing gold and the machinery for an inter-
national convention, both for centralizing the demand for
gold and avoiding wide fluctuations in the purchasing power
of gold, are described.

" Let me examine the obstacles.

" The main obstacle in stabilizing the value of a currency
is an obvious one.

" So long as an indefinite increase in the amount of currency
is possible there can be ho stable value ; it is therefore essential
that the output of the printing press should be limited, and
that the annual expenditure of every State should be balanced
by taxation.

" The true remedy is the reduction of State expenditure
to the point at which it can be met out of taxation paid out
of income.

" But this remedy may, for the moment, be unattainable,
so the report recognizes that as a temporary expedient external
loans may be necessary.

" The next obstacle dealt with is the great depreciation
in some currencies. Stability, however, does not depend
upon any particular parity to gold.

" Stability in some countries may be found at pre-war
parity, and in others it may be wiser to fix a new parity
more nearly approximating to the present exchange value
of the monetary unit.

152 The Genoa Conference

" National pride may hinder the adoption of a new parity,
but the report rightly emphasizes the undoubted fact that
the essential requisite is the achievement by each country
of stability in the value of its currency.

" It is a mistake to suppose a return to the gold standard
is a solution of all our difficulties, or that it is only in countries
where inflation is still going on, and where currency is in a
state of collapse, that a serious monetary problem exists to be
solved.

" In reality countries with sound currencies have problems
almost equally formidable to deal with.

" Since the war, prices of commodities have displayed the
wildest fluctuations, not only in European countries with
paper currencies, but also in the United States, with its gold
currency.

" There is general agreement among experts that one of
the most prominent causes of depression of trade and of
unemployment is the fall of prices which has occurred in
the past two years.

" In the resolutions which have been passed under the
head of Currency, there is embodied the principle of preventing
undue fluctuations in the purchasing power of gold, and
therefore equally in the purchasing power of currencies based
on gold.

" If this policy can be put successfully into operation, the
price changes, which have caused so grave an unsettlement
in trade both in America and in Western Europe, will become
less frequent and less violent.

" The price changes to which I refer are changes in the
general level of prices, changes which affect all commodities
together.

" In recent years we have learnt to distinguish such changes
from casual changes in individual commodities.

" Regulation of prices in this sense means regulation of
credit.

' The experience both of the Bank of England and of
the Federal Reserve Board in the United States since the

The Palazzo di San Giorgio again 153

war has demonstrated afresh the sensitiveness of prices to
credit conditions.

" Thus the power to influence prices, and the responsibility
for using that power, belong to the great central banks.

" In currency policy they are the directing intelligence,
and therefore the first practical step to be taken will be the
meeting of these central banks which is to be called by the
Bank of England.

" It may be hoped that the result of that meeting will be
such co-ordination of credit policy throughout the world
as will enable the great banks to make the general level of
prices more stable.

" This policy pre-supposes the general return to the gold
standard.

" Nevertheless in the interval before that general return
has been completed, the co-operation of central banks can
undoubtedly do much to introduce stability and confidence
into business.

" Moreover the existence of a credit-policy properly co-
ordinated and directed to a concerted end will remove
obstacles from the path of countries which are still using a
paper standard, but are endeavouring to return to gold.

!< Thus a remedy will be provided for the distress from which
both classes of countries are suffering.

" On the one hand, in those countries which are suffering
from unemployment, traders will be able to make their plans,
confident that their markets will not be deranged by any
sudden contraction or unhealthy expansion in the purchasing
power of their customers.

" On the other hand, countries which take the painful
first step towards regaining control of their currencies by
balancing their budgets will be secure that their plans will
not be upset unexpectedly through credit storms originating
in the sound currency countries.

;< This will facilitate the restoration of conditions in which
commercial transactions can be effected, even in the distressed
countries, under something approaching normal conditions.

154 The Genoa Conference

" The policy embodied in the resolutions might be re-
garded as sufficiently denned by the resolutions themselves.

" Nevertheless the Finance Commission have indicated
a further step which will help in carrying the policy out.

" They have suggested that there should be an International
Convention, and have remitted to the meeting of central
banks the consideration and the technical elaboration of a
scheme for such a Convention.

" The scheme is based on the most modern and scientific
method of economizing the use of gold as currency.

" I should perhaps add that the principle of stabilizing
the purchasing power of gold is the necessary complement
of this scheme, since otherwise economy in the use of gold
might be carried to such an extent as to bring about a serious
inflation of prices.

" An invitation has been extended to the United States
to co-operate.

" Indeed, without American co-operation the proposals
cannot be carried out.

" Europe, even with the assistance of Japan and other
extra-European gold-using countries, cannot stabilize the
purchasing power of gold, if that means counteracting fluctua-
tions arising from so vast a gold-using area as the United
States, which contains little less than half the gold currency
of the world.

" But America herself has suffered severely from instability
in the value of gold.

" And here is a field in which she can both give and receive
invaluable assistance without involving herself in any political
difficulties and without being called upon to make any sacrifice.

" The co-operation among central banks, which we look
forward to, is not be to embodied in any rigid agreement.

" That would be as ill-suited to the methods and traditions
of the several European central banks as to the Federal
Reserve Board itself.

" What is contemplated is a continuous exchange of ideas,
which will enable each Central Bank to conduct its credit

The Palazzo di San Giorgio again 155

policy with adequate knowledge of the credit policy of its
associates.

" All will thus be enabled to combine to follow the common
aim of stabilization.

" The Resolutions to which I have referred form a cur-
rency code. The essentials are the limitation of the issue
of paper currency, the fixing of a parity with gold, the econo-
mizing of the use of gold, and the co-ordination of credit
policy designed to prevent fluctuations in the commodity
value of gold.

" This then is the code of Genoa.

" I will turn now to the subject of the exchanges. It is
generally recognized that the stabilization of the exchanges is
a branch of the problem of currency.

" Given stability in the internal value of the currency,
stability in the exchanges will easily follow.

" The resolutions dealing with exchange are accordingly
limited to that part of the subject which does not overlap
with the currency resolutions.

" The primary recommendation repeats and elaborates
that made at the Brussels Conference against artificial control
of exchange operations.

" But an interval of time must pass before the stabiliza-
tion of the exchanges by means of currency reform can be
realized, and with a view to mitigating the harmful effects
of exchange fluctuations during that interval, the Exchange
Sub-Commission have added a useful proposal for a techni-
cal improvement in the exchange market, which, by facilitat-
ing the purchase and sale of future exchange, will, it is
hoped, limit in one direction the exchange risks which in-
terfere so seriously with the free flow of trade.

" The remaining resolutions deal with credits. When cur-
rencies have been stabilized and exchanges are freed from
wild fluctuations investible capital will flow freely from
countries where there is a surplus lending capacity to countries
which are in need of external assistance.

" Capital will indeed seek remuneration where it is needed

156 The Genoa Conference

as soon as conditions are restored under which it can safely
operate.

" The resolutions lay down the conditions and point out
the steps that are necessary to secure them.

" The final Resolution recommends that the Governments
represented at this Conference should support the establish-
ment and facilitate the operations of the Central International
Corporation and National Corporations affiliated to it.

" Much progress has already been made in the organiza-
tion of these Corporations.

" Twelve of the Governments represented here have pledged
themselves subject to the approval of their Parliaments
to found National Corporations and to secure the subscrip-
tion of the required capital.

" The total capital to be subscribed in the moneys of the
different countries will be the equivalent of £20,000,000 sterling.

" The capital will be under the control of the Central
International Corporation, which will be registered under
the British Company Laws and managed by a Board of
Directors nominated by the affiliated national companies.

" The main object of the Central International Corpora-
tion will be to render financial and technical facilities in the
reconstruction of Europe. It will co-operate with existing
and new institutions, without any attempt at creating a
monopoly, in hastening forward works of public utility and
developing undertakings in countries whose conditions offer
sufficient security for productive enterprise.

" It may be thought that the capital is insufficient, but it
should be remembered that behind the national corporations
stand the vast resources of all those countries from which
specific undertakings approved and supported by the Central
International Corporation can be financed.

" I venture to think that the Resolutions recommended
to this Conference are worthy of acceptance ; they have
been adopted by the Financial Commission after hearing the
opinion and taking the advice of the best-known experts
of world-wide experience and reputation.

The Palazzo di San Giorgio again 157

" The Resolutions contain practical proposals, the carrying
out of some of which is immediately possible, although
others will have to be postponed, but when sooner or later
they are put into operation the impediments now obstruct-
ing financial and industrial intercourse between the peoples
of the world will tend to disappear and the flow of capital
and the interchange of the products of labour will once more
be freely resumed."

The President (speaking in Italian) :

" A general debate is now open on the question dealt
with by the Report of the Commission. I call on M. Picard
to speak."

M. Picard (France) (speaking in French) :

" I rise to speak here because I represented the French
Delegation on the Financial Commission, and because that
Delegation has given its adhesion to the recommendations
now submitted to the Conference for its approval.

" I feel it my duty to explain why we have thus given
our adhesion, and have, at the same time, made certain obser-
vations which are noted in the minutes of the Sub-Com-
missions on Currency, Exchange, and Credits.

" The recommendations laid before you are of two kinds :
some are of lasting significance, and appeal to the great
principles on which the financial system of any country
should be based ; others deal with temporary measures de-
manded by the present state of Europe and, one may add,
of the world.

" There are some who have smiled at a reference to mone-
tary and financial principles, saying that what was needed
was not a course of moral instruction but the discovery of
practical remedies.

" Such persons fail to recognize that morality has a prac-
tical application. A man who wishes to strengthen or rebuild
a house must first ascertain that its foundations are secure.
The foundations of all monetary and financial construction
are moral.

" To adjust normal expenditure to normal resources ; to

158 The Genoa Conference

honour obligations incurred ; to pay debts in a currency
which is not depreciated at the very moment it is used
because it is artificially created by all too rapid printing ;
and, to attain those results, to shrink from no effort, no
sacrifice — it is well to recall such principles as these in this
ancient and illustrious City of Genoa, whose prosperity
was founded on trade, in other words, on the mutual honour-
ing of agreements whether oral or in writing. It is well to
recall them in this building, which, as Sir Laming Worthington-
Evans has reminded us, housed one of the most famous
banks in the world, which for five hundred years maintained
these great principles of financial morality.

' Your Commission has not confined itself to this theoretical
statement, essential though that be. It did not wish to
incur the reproach addressed by our fable writer La Fontaine
to the schoolmaster who, seeing a child drowning, solemnly read
him a lesson on the causes and consequences of his folly, with-
out first giving him a helping hand to bring him to the bank.

' Your Commission has given a hand to those who asked
for help, and the French Delegation has given its support to
the two groups of practical measures proposed by the Com-
mission.

" The first consists of an inquiry undertaken by the banks
of issue into the most suitable means of introducing some
stability into the disordered movements of the exchanges.

" The programme submitted with this object to the meeting
of the banks is very comprehensive ; it does not involve
their adhesion in advance to the systems considered, although
some of us thought that the report presented by the economic
experts to the Sub-Commission on Currency appeared to lay
too much emphasis on certain theories. We have not con-
cealed this opinion, and we do not intend to withdraw anything
we have said on this subject.

' This programme constitutes a scheme of practical inquiry
which the experts of the banks of issue will have to elaborate,
and in doing so it is the intention of your Commission to leave
them the completest independence.

The Palazzo di San Giorgio again 159

" I have no doubt that these inquiries will lead to useful
reforms, the beneficial effect of which will shortly be felt.

" We have also given our adhesion to the project of an
International Corporation, while observing that the carrying
out of this scheme would be conditional on the obtaining of
authority in certain cases. We have learnt with satisfaction
that a large number of States are desirous of assisting in this
undertaking.

" The French Delegation wishes, in conclusion, to thank the
Presidents of the Financial Commission, Sir Robert Home
and Sir Laming Worthington-Evans, for the courtesy, authority
and energy with which they have directed our labours.

" If the Commission is not able to submit to you recom-
mendations capable of putting an end in twenty-four hours
to the existing monetary and financial difficulties, it is not for
want of serious consideration or wise direction, but because
there is in fact no magic wand which can exempt humanity
from labour and effort."

The President (speaking in Italian ):

" I call upon M. Schanzer, Delegate of Italy, to speak."

M. Schanzer (Italy) (speaking in French) :

" There can be no doubt that the Resolutions submitted
by the Financial Commission provide a complete and prac-
tical scheme for the re-organization of European finance,
which has been so seriously affected by the war. We are
all aware of the troubles which at present affect the world
and we can all realize the dangers by which we shall be
menaced if we do not succeed, without loss of time, in taking
energetic measures to ensure a return to normal economic
conditions. By their knowledge and experience, the experts
have shown us the way to achieve our object. They have
pointed out the means which we must employ without hesita-
tion and without delay to put an end to the present dangerous
situation and to avoid disasters even greater than those from
which we have suffered in the past.

" But it is our task, gentlemen, as statesmen, to make
the effort necessary to save ourselves ; it is for us all to

160 The Genoa Conference

show that decision and force of purpose which are essential
for the realization of the principles which the technical
experts and the Financial Commission have submitted for
our approval. It cannot after all be denied that at the root
of every financial problem there lies a moral, a political
problem.

" We are recommended to stabilize public expenditure in
order to avoid the opening of new credits, we are advised
to reduce expenditure. But is not the reduction of expen-
diture a moral problem ? The reduction of expenditure
means the abandonment of all the selfish and excessive
claims and pretensions of the individuals, groups and classes
which are all eager for improved conditions. In many countries
the concessions which are thus rendered necessary result in
increased expenditure, which cannot be compensated for by
increased taxation beyond a certain limit. In all countries
since the war, instead of a tendency towards thrift and careful
living, there has unfortunately been a tendency towards
luxury, pleasure and dissipation, especially amongst the
social classes which should give to other classes an example
of moderation and of a clear realization of the vital needs
of the State and of society.

" It is, however, the political aspect of the problem to
which we must chiefly devote our attention. The balancing
of our Budgets, which is essential if we are to avoid inflation
and depreciation of the currency, depends upon the general
and political attitude of each country. It is only by a policy
of peace, mutual goodwill and international co-operation,
and by the strictest economy in public expenditure that we
can hope to obtain that budgetary equilibrium which has
been justly described as the essential basis of all financial
reconstruction.

" In this connection, gentlemen, I would like to call your
attention to the policy which has been followed by Italy
since the war, and to the efforts which have been made by
the Italian people to overcome the great financial difficulties
which have resulted from the war.

The Palazzo di San Giorgio again 161

" It is hardly necessary to state that Italian policy has
always been based upon a sincere desire for peace, and that
Italy has regarded the problem of the financial and economic
reconstruction of the country as the most urgent question
which confronts her.

" Our taxation to-day is six times greater than it was
before the war ; direct taxation is nine times greater. Our
budgetary deficit which three years ago had reached a total
of 24 milliards of lire is now reduced to three milliards. We
have reduced our army to a total of 200,000 men only.

" We have considered the reduction of our expenditure
not only as a duty towards ourselves but also as a duty
towards other nations, whose normal economic life and
prosperity are intimately bound up with the economic and
political stability of each member of the international
society.

" Italy therefore has proved, by her legislative and poli-
tical work, and by the heavy sacrifices made by her tax-
payers, that she has fully realized the duties of the hour.
We have not been able to attain complete budgetary equi-
librium, but we shall not shrink from the necessary sacri-
fice and reduction of expenditure, so long as our object is
unattained.

" I have spoken only of the efforts made by Italy, but
I am well aware that similar efforts have been made in other
countries. Henceforward, our rivalry must consist not in
unnecessary or dangerous expenditure, but in economy
and prudence. That is the principle with which I would con-
clude my speech.

" I think, gentlemen, that we should consider the valuable
work which has been done by the Financial Commission
as an introduction to the political work which we must
accomplish. Ours is a great and noble task, and the eyes
of the whole world are upon us. The world is looking to
us to bring about the pacification of men's minds, to establish
lasting guarantees of peace, and to re-establish international
economic collaboration. Unless all our efforts are directed

ii

162 The Genoa Conference

to the realization of these lofty aims, the recommendations of
the Financial Commission will have been made in vain.

" I would conclude my speech on a note of sincere op-
timism. In these few weeks at Genoa, we have already held
interesting and delicate discussions, we have already over-
come considerable political difficulties. We have all made
sacrifices to conform to each other's points of view, and
we have worked in the true spirit of this Conference, which
is, and which must be, a spirit of peace, conciliation and
international goodwill.

" I can therefore conclude, gentlemen, by expressing my
entire and unshakable confidence in the success of our
work, which I am convinced will mark the commencement
of a new era of European history, a period of sincere and
whole-hearted collaboration for the well-being of peoples
and for the progress of humanity."
The President (speaking in Italian) :

" I call upon Jonkheer Van Karnebeek, Delegate of the
Netherlands, to speak."

Jonkheer Van Karnebeek (Netherlands) (speaking in
French) :

" May I be permitted, Mr. President, to add a few words
to the vote which the Netherlands Delegation intends to
give to the resolutions which the Second Commission has
submitted to our attention.

" When the Netherlands Government learned the pro-
gramme of the Genoa Conference, the proposals relating
to financial questions did not fail to rouse its keenest interest.
In the course of the last years, international monetary prob-
lems have, in the Netherlands, formed the subject of thorough
study on the part of competent men, and I may be allowed
to recall to you the well-known memorandum drawn up in
1920 at Amsterdam, to which men of prominent position in
the domain of the financial theory and practice of various
countries lent their collaboration and the prestige of their
names.

" We have now before us the results of the work of the

The Palazzo di San Giorgio again 163

Second Commission, and the Netherlands Delegation wishes
to adhere entirely and unreservedly to the conclusions of that
Commission. On various points of capital importance an
understanding has been reached in spite of the difficulties
and complexity of the problems. As an essential condition,
among others, to the economic reconstruction of Europe, it
has been set forth that each State should succeed in balancing
its budget. A detailed programme has been elaborated
which points out to each country the way to re-establish the
effective gold standard. With reference to the delicate
problem of devaluation of monetary units, a happy formula
has been found which takes into account divergent conditions
in the various countries. Co-operation of wide importance
between Central Banks of Issue may be looked forward to in
the near future as the first tangible result of the Conference.

" The participation in the Genoa Conference of so large
a number of States, represented by their most prominent
specialists, lends a commanding moral prestige to the con-
clusions of the Conference. The work of Brussels has been
surpassed, and the Netherlands Delegation hopes that these
results will mark the beginning of the restoration of Europe,
the economic equilibrium of which has been so profoundly
shaken.

" As the Commission of Experts stated in its report, there
can be no hope of final success in restoring the currencies or
the economic welfare of Europe until the subjects to which
the memorandum of 1920 refers, and in particular the problem
of inter-Governmental indebtedness, have been resolutely
tackled.

" In fact, the problem of international debts dominates the
economic situation of Europe. So long as this problem has
not been solved by the parties directly concerned — and among
these is the great American Republic — the most salutary and
incontestable financial principles remain mere economic
morality, whatever may be the strength with which such
principles are set forth, or whatever the sincerity of the
endeavours of the nations to secure their application.

n*

164 The Genoa Conference

" We have come to Genoa accompanied by the wishes
and hopes of many peoples. Under the menace of the growing
economic crisis, the peoples follow our deliberations with the
hope of seeing the rise of new and better realities. The
Netherlands Delegation expresses the wish that the Genoa
Conference, whose Second Commission could do no more
than it accomplished, will be followed in the near future by
the realization of the new circumstances and solutions in-
dispensable for the definite re-establishment of a state of
economic stabilization and repose, enabling Europe to recover
confidence, and to draw, in a spirit of concord, the full benefit
of the important work achieved in this hospitable city."

The President (speaking in Italian) :

" I call upon M. Schulthess, Delegate of Switzerland, to
speak."

M. Schulthess (Switzerland) (speaking in French) :

" The Swiss Delegation declares its complete adhesion to
the resolutions voted by the Financial Commission, and also
supports the declarations made by the Netherlands Delegation.

" The Swiss Delegation is, in particular, of opinion that the
proposed meeting of Central Banks and the permanent
co-operation between these Banks will be such as to exercise
a beneficial effect in the future on the exchange market, and
to facilitate to some extent credit operations.

" The Swiss Delegation views with satisfaction the for-
mation in the immediate future of an International Financial
Corporation, and of National Associations whose activity,
if it is well directed, should have beneficial effects on the
economic reconstruction of Europe.

" We fully recognize the technical value and the importance
of the conclusions which the Financial Commission has come
to regarding currency reform, and the conditions which it is
desirable to lay down for the granting of credits.

" But we must take note of the fact that the majority of
these resolutions are not immediately applicable, and that,
in order to restore the confidence so necessary to all com-
mercial, financial and industrial operations between States,

The Palazzo di San Giorgio again 165

it is necessary first to solve various problems of a political,
social and moral character.

" On the other hand, and without in any way wishing to
anticipate the results which may be arrived at by the Economic
Commission, the Swiss Delegation takes the liberty of empha-
sizing the fact that economic and financial questions are not
separated at the present time into water-tight compartments,
but that such questions, and particularly those relating to
currency and exchange, affect to the greatest possible extent
the whole economic situation.

' Thus the principal factors in pre-war commercial policy,
customs duties on imports, and on exports, and import
facilities or restrictions, no longer possess the same relative
importance, if we compare them with the importance of
currency depreciation in various countries, and the rapid
and sudden fluctuation of the exchanges.

" States whose currency is continually depreciated are
thus enabled to compete ruinously with other nations, and
such countries are practically closed to the importation of
manufactured articles. This fact constitutes one of the
principal causes of the dangerous crisis from which Europe is
suffering, and which is manifested chiefly by unemployment
in countries with a healthy or relatively healthy currency,
and by the excessive reduction in purchasing and consuming
power in those countries whose currency has depreciated to
a considerable extent.

' The resolutions of the Financial Commission, however
judicious and wise they may be, are not of a nature, alas,
to bring about an immediate solution of such problems, or
even a solution in the very near future.

" Nevertheless, the Genoa Conference has raised the greatest
hopes throughout the world ; and the situation at the present
time is grave, and threatens to become worse, even beyond
remedy, if some means are not found for regulating the present
currency situation.

" One of the principal causes of currency depreciation and
of the fall in the exchanges certainly arises from the fact of

166 The Genoa Conference

international indebtedness, and, as the Experts' Report most
wisely points out, there is no hope of re-establishing European
currencies and the economic welfare of Europe as a whole,
before the problem of international indebtedness has been
resolutely tackled.

The solution, or solutions, of this problem are not within
the competence of the Genoa Conference, and the work which
has been performed by it can only be considered as pre-
paratory ; but we take the liberty, in conformity with the
initiative of the Netherlands Delegation, of expressing the
hope that those who are entrusted with directing the destinies
of the nations will not hesitate to take this problem into
consideration, and to solve it by means of a common agree-
ment before it becomes too late ; for the economic restoration
of this Continent depends in a large measure upon the solutions
which may be found for this problem."
The President (speaking in Italian) :

" I call upon M. Tchitcherin, Delegate of Russia, to speak."
M. Tchitcherin (Russia) (speaking in French) :
" The adoption of the Resolutions which have been sub-
mitted to-day by the second and fourth Commissions is the
first general international act in which Russia has taken
part during the last four years. This event marks an impor-
tant stage, but it involves the necessity of making certain
explanations and certain reservations arising out of the
special international position which Russia has occupied
during the past few years, and which she still, in a large
measure, continues to occupy. The Russian Delegation has
done its utmost to participate in the work of the various
Commissions, but it has felt from the first that the situation
has to some extent limited the possibility of its achieving
results, that it was prevented from participating to the fullest
extent in the new ideas due to historic evolution, or from
contributing its proper share to the general content of such
ideas. For one thing, the work of many past international
conferences and commissions, which have been studying
these subjects during the last few years, was not available

The Palazzo di San Giorgio again 167

for the Russian Government. You must remember that we
have not even semi-official representatives in a great number
of States, and it has been difficult, if not impossible, to obtain
information about a great deal of work which has recently
been accomplished. Nevertheless, much has been accom-
plished in the Commissions. At the same time, I wish to
emphasize the reservations which have been made by the
Russian Delegation, and which are recorded in the Minutes of
the Commissions ; I wish to declare that these reservations
are maintained. The Russian Government reserves its com-
plete and full liberty of action with regard to these resolutions,
which pre-suppose co-operation in financial matters with the
League of Nations or its Organizations, since the League of
Nations is a body which has not been recognized by Russia.
The Russian Delegation also desires to emphasize the fact
that, owing to the peculiar situation of Russia from the point
of view of foreign trade, it is not possible for her Government
to renounce control over exchange operations, in spite of the
fact that such control is declared in the Report to be futile
and mischievous. Though agreeing that the reconstruction
of Europe is only possible by means of financial assistance to
be accorded by the stronger states to the weaker states, we
consider that this assistance should not only be accorded by
means of private credits, but also by loans between Govern-
ment and Government. The passage in Paragraph 19 of the
Report gives authority for this to be done, in the case which
applies to Russia.

" As regards Paragraph 19, the Russian Delegation desires
to insist that, if international corporations are formed, as is
proposed, they must keep entirely and absolutely within the
limits which are laid down for them ; that is to say, that they
must not be of such a nature as to create any form of
monopoly. We pay all homage to the observation of the
Italian Delegation that it is only by a policy of peace that the
nations will be enabled to balance their budgets. We agree
in particular that the reconstruction of the world depends
upon a policy of general disarmament, and that in this matter

168 The Genoa Conference

the general interests of the whole world must be given
precedence over private interests or group interests. The
Russian Delegation will advise its Government to carry out,
within the limits of its powers, the decisions which have been
adopted by these Commissions ; but I must repeat that Russia
is placed in a somewhat difficult position, because some of
the decisions of these Commissions have been confided to
organizations of the League of Nations, which, as I have said,
Russia has not recognized. With this reserve, the Russian
Delegation adheres to the proposals of the second and fourth
Commissions.

" In conclusion, I desire to express my conviction that it
is only by economic collaboration between two worlds whose
policy is based on differing economic systems that we can
trace the path towards reconstruction and peace."

The President (speaking in Italian) :

" I call upon Dr. Rathenau, Delegate of Germany, to
speak."

Dr. Rathenau (Germany) (speaking in French) :

" Gentlemen, — The world will find with satisfaction that
the Commission whose conclusions have just been read has
done excellent scientific work. They have found formulae
for the solution of serious financial and economic questions
which surpass anything one could have imagined. The
Financial Commission has very rightly alluded to ideas of
a similar nature which certain Governments proposed so long
ago as January, 1920. One sees, therefore, that these ideas
have been propagated for the last two years, but unfortunately
they have never been put into practice. Since 1920, the
world market has deteriorated in a most deplorable way.
World trade, which in 1920 was still nearly the same and of
the same importance as before the war, has decreased con-
tinuously during 1921 ; it has decreased by at least one-
third, if not even by one-half, as compared with its pre-war
volume. This decrease of international sales reveals a con-
stant reduction in purchasing power, a reduction which, in
many parts of the world, has caused unemployment of extreme

The Palazzo di San Giorgio again 169

duration and extent. The Sub-Commission on Labour Ques-
tions has stated that there are at present in the world nearly
ten million unemployed. If you include the families of the
unemployed, the total represents a whole civilized people,
whose members are animated by an anxious desire to work,
but who are unable to do so. The reasons for this deplorable
situation have been clearly shown by the best experts in the
world, who have met here at Genoa. The chief reason is the
enormous burden arising from the obligations imposed by the
war. The fact that these charges have to be met has given
rise to economic difficulties, which certain post-war political
measures have made still worse. The experts say that if a
country is obliged to fulfil certain obligations with regard to
other countries, those obligations ought to be settled, or there
ought to be a possibility of settling them, through the sale of
goods and commodities. To effect such sales, it is necessary
to have markets with sufficiently developed purchasing power.
The purchasing power of world markets to-day is not suffi-
ciently great to enable the debts of the whole world to be
satisfied in such a way. We have drawn up figures, based, of
course, on estimates, but still correct within certain limits,
which show that the total amount of world export ought to
be doubled in order to allow for the payment of interest on
war debts contracted by the principal States, and in order to
make some provision for amortization. The world market
to-day, far from having been doubled, is at present reduced
to two-thirds of its importance as compared with pre-war
conditions, if it has not already fallen to one-half. The
financial and economic consequences resulting from this are
deplorable. The enormous burden under which European
nations are groaning must lead, on the one hand, to a dis-
turbance of the markets in creditor countries and, on the
other hand, to the constant depreciation of currency in debtor
countries. Added to that, there is a continual reduction in
purchasing power throughout the world. We are moving in
a vicious circle. Debtor countries are obliged to procure
foreign money through exporting their commodities, and

170 The Genoa Conference

find themselves in bitter competition with their creditors on
the same markets. The debtor countries are still more bound
to sell than the creditors, and cannot sell enough. That is
the reason why their currency is going down ; the fact that it
does go down brings about a temporary fall in the price of
their goods and commodities, but such forced sales do not
produce for the countries concerned either sufficient means to
live or a purchasing power which will be of benefit to them.
The debtor countries must hand over a large part of the
foreign paper they secure by sales of their goods to the creditor
countries. In spite of arduous work, the value of their cur-
rency goes down, and they have not enough left to provide
for their own needs. Their purchasing power diminishes,
and the world market is reduced to the same extent. The
creditor countries, in order to protect their own industry, set
up, as against importation from debtor countries, barriers of
prohibitions and taxes on imports. The debtors, obliged to
procure means of payment whatever happens, are obliged to
reduce again the value of their goods, and hence a new fall
takes place in the value of the currency of debtor countries,
and a new cause arises of unemployment in creditor
countries — new measures of commercial competition and
struggle.

" Thus, through a vicious circle, the burden of interna-
tional indebtedness converts every measure of defence into
an aggravation of the circumstances against which it was
designed.

'' This will not cease unless men no longer act like those
who, pent up in a narrow room, rush at each other's throats,
instead of coming to a common agreement which will allow
them all to escape.

" The theory is clearly recognized and has already been
stated in part for some time, but what has been lacking so
far is its practical application. Our experts tell us that the
crisis may be overcome by a combination of financial and
economic measures. The restoration of the exchanges is the
primary condition ; the restoration of trade markets will

The Palazzo di San Giorgio again 171

automatically follow. In any event, it will be necessary to
come to the assistance of the weaker nations. The stability of
their exchanges is the indispensable preliminary to the restora-
tion of their purchasing power and to the restoration of the
world market, the indispensable preliminary to a new economic
and technical progress, and eventually to the maintenance of
civilization itself. It will therefore be necessary to combine
closely financial and economic measures, and what is most
important, it will be necessary to utilize them and to put
them into practice as soon as possible. The world does not
expect merely theses and theories from the Genoa Conference.
We still hope that the representatives of the great nations will,
as regards economic and social needs of the greatest urgency,
firmly resolve upon energetic, efficacious and immediate
co-operation."

The President (speaking in Italian) :

" The general debate is now closed, and the meeting will
pass to the discussion of the several articles of the proposals
submitted by the Financial Commission. I will now read
out the numbers of these Articles. As you all have the text,
I do not consider it necessary to read the text, but will give
the numbers of the Articles. If no one wishes to speak on an
Article, it is understood that the Article in question is
approved. If any Delegate wishes to speak on an Article,
then he must ask permission to speak when the number of
the Article on which he wishes to speak is read out.

" The subject is the resolutions of the Financial Commis-
sion. If no observations are made, the Article is approved."

Resolutions 1-7 were adopted.

The President (speaking in Italian) :

" I call upon M. Bertone, Delegate of Italy, to speak."

M. Bertone (Italy) (speaking in Italian) :

" The Resolutions of the Financial Commission contain
one central point to which all other questions are sub-
ordinated. It figures among the questions submitted for
examination by the Conference in virtue of the Cannes Resolu-
tions. It deals with the report on public finance.

172 The Genoa Conference

" Regarding the question of the reform of public finance
in the different States, the Italian Delegation had the honour
of submitting some proposals in a draft which it presented
to the Conference. The substance of these proposals is
reproduced in the Resolutions adopted by the Sub-Commis-
sions on Currency and Credits.

" The re-establishment of public finance is the indispensable
preliminary to currency reform in the different States. This
is the goal towards which the efforts of the Governments
concerned should be directed. But financial reform does
not merely imply an increase of revenue ; it means above
all a reduction of budgetary burdens, if the sources of revenue
in various States are not to be dried up by the imposition of
excessive pressure of taxation. This point of view is embodied
in the seventh Resolution of the Financial Commission.
Therefore, if the recommendations of the Commission are to
be accepted by the Governments concerned, it is essential that
all States should immediately undertake the task of enforcing
the most vigilant economy.

" It is true that measures of this sort concern the internal
policy of the various States, and that each of these is free
to exercise its action in this sphere as it thinks fit. Never-
theless, in drafting its resolutions, the Financial Commission
decided to indicate the procedure which seemed most appro-
priate for achieving these results. It also expressed the
hope, in Resolution 17, that those countries which need
credits, to assist them out of the unfavourable situation in
which they now find themselves, should furnish proof that
they have made the requisite efforts to reform their public
finances.

" The Commission's recommendation in this connection was
necessary if the resolutions dealing with financial reform in
the various States were not to appear merely an academic
repetition of principles known to all and of formulae already
adopted, but should really possess a greater value than this,
by showing the firm intention of the Conference to urge the
nations who are most affected by the present economic crisis

The Palazzo di San Giorgio again 173

to devote themselves resolutely to the work of financial reform,
because an effort in this direction will be required of them as
a necessary condition of securing financial assistance from other
States.

" In this connection, the Commission recognizes that a
knowledge of the financial conditions prevailing in various
States is a necessary factor in the creation and maintenance
of mutual confidence.

" An existing organization — the League of Nations — has
been entrusted with the task of undertaking the co-ordination
and publication of information concerning the budgetary situa-
tion in the various States. This information will be published
periodically, when transmitted to the League by the States
concerned.

" In order that this recommendation may have a more
general and a wider scope, it is desired that the publications
in question should deal not only with States Members of the
League, but with all States.

" The relevant resolutions of the Commission are substan-
tially the same as those submitted by the Italian Delegation
in the Memorandum which it has drawn up in respect of
public finance ; and, as is the case with all the other resolu-
tions of the Financial Commission, they have the full support
of Italy.

" May the action consequent upon these resolutions con-
tribute to the restoration of international relations in the
widest and the most complete sense, to the fresh develop-
ment of economic life throughout the world, and to the welfare
of all nations."

Articles 8-13 were adopted.

The President (speaking in Italian) :

" I call upon M. Gomes, Delegate of Portugal, to speak."

M. Gomes (Portugal) (speaking in French) :

" As the flight of capital is one of the chief causes of the
speculation which at present prevails, and of the rapid fall
of the exchange in all countries, it seems to me that it would
be advisable to invite the United States of America to

174 The Genoa Conference

co-operate in the measures which are suggested for dealing
with this situation. Since the United States is not a Member
of the League of Nations, action by the League of
Nations, without reference to the United States, might be
inoperative."

Articles 14-19 were adopted.
The President (speaking in Italian) :

" All the resolutions proposed by the Financial Commission
are approved.

" The Assembly will now pass to the general discussion of
the Report of the Transport Commission, and I call upon the
Reporter for that Commission."
M. Jaspar (Belgium) (speaking in French) :
" Gentlemen, — The text of the Report which the Transport
Commission has the honour to submit for your approval is
before you.

" You will see that this Report is in two parts :
" (a) The text of the draft resolutions, in eight articles ;
" (b) The text of the reservations formulated by various
delegations.

" As the President of the Commission, M. Theunis, who has
been temporarily recalled to Brussels by pressing duties,
has already said in his inaugural speech, the Transport Com-
mission based its work on the study of Articles 58 to 61 of
the London Experts' Report.

" The substance of these four Articles is to be found in
the Draft Resolutions which are before you. These show
that almost all the Powers represented at Genoa have agreed
to recognize in this way the foresight of the London Experts,
and the equitable spirit shown by them in elaborating their
Report.

" The Transport Commission studied at Genoa the restora-
tion and amelioration of international traffic by rail and
water.

" This was a heavy task ; but it was greatly facilitated,
thanks to the useful work accomplished by the League of
Nations in 1921 at Barcelona, and thanks also to the excellent

The Palazzo di San Giorgio again 175

work done at Porto Rosa in November, 1921. I must acknow-
ledge also the work of the experts who were present at
Barcelona and Porto Rosa, and were so kind as to lend
their knowledge for the purposes of the work which Genoa
has accomplished largely owing to them.

" These two Conferences have practically made a thorough
inventory of the difficulties in transport matters which have,
since the end of the war, been the sad lot of a great number
of the Powers. These two Conferences have formulated,
edited, and approved Conventions and Resolutions, all
recommendations tending to minimize these difficulties,
whilst solving in the general interest numerous technical
problems.

" At its opening session, the Genoa Conference created
the Transport Commission. This Commission could not do
better than submit these judicious texts to a new examina-
tion, and ask the Powers represented at Genoa to what extent
they were satisfied, or what were the amendments which
they desired to introduce into these texts.

" The suggestion which the President made for the direc-
tion of our labours in this manner was generally approved.
We set to work then on these lines.

" To-day, Gentlemen, we lay before you a Draft Reso-
lution generally adopted by the Transport Commission, which
will, we hope, meet with your approval. You will, I am sure,
listen attentively to the text of the reservations which cer-
tain Powers have formulated in respect of certain Articles
of this Draft Resolution. Indeed, these reservations clarify
the situation. They also have the great merit of freedom
of speech. Taken together, they constitute a focussing —
which is as necessary as it is useful — of all that has been
done, and also of what remains to be done in the important
domain of international transport.

"As to what remains to be done, there is no doubt that
the remaining work will be accomplished in that wide spirit
of solidarity which has been manifested in the course of our
debates. France will be good enough to convene the technical

176 The Genoa Conference

conference foreshadowed in Article 6 of our Resolutions,
which is destined to bring these Articles to fruition. I have
no doubt that this Conference will be inspired with the same
principles and with the same spirit as the principles and spirit
with which Genoa has been inspired, and I wish that Con-
ference every success. It will be helped by the League of
Nations, which will aid us in finishing the work upon which
we have started here.

' We thank the League sincerely for the help which it is
about to give us.

" I must also thank the Financial Commission for the support
which some of its most distinguished members have given
to the Transport Section, in order to clear up the difficult
question of the exchanges, which is such a disturbing influence
on the fixation of net prices in one of their essential elements,
that is to say the price of transport, and which is thus a
hindrance to export trade, which is one of the most important
factors in the development of questions such as the economic
peace of the world.

" Before concluding, I cannot refrain from thanking, in the
name of the Belgian Government, the Genoa Conference for
the great honour which it has done to my country in asking
the Head of its Delegation to preside over one of the most
important Commissions of the Conference."

The President (speaking in Italian) :

" A general debate on the motions of the Transport Com-
mission is now opened.

" I call upon M. Barrere, Delegate of France, to speak."

M. Barrere (France) (speaking in French) :

" Gentlemen, — I beg to support the conclusions and the
Report submitted by M. Jaspar. I only wish to add that
the French Delegation fully adheres to the text of the Report
without any reservation, except that which is indicated in
the Report itself."

The President (speaking in Italian) :

" As there are no other speakers down for the general
debate, the debate is now closed, and the meeting will proceed

The Palazzo di San Giorgio again 177

to pass the several articles contained in the proposals of the
Transport Commission. Perhaps it would be advisable, in the
case of the Transport Commission's Report, to pursue a
different method from that which was followed in the case
of the Report of the Finance Commission. As the Articles
in the Report of the Transport Commission are closely con-
nected, perhaps it is best that we should consider them all
together. Therefore, if any speaker wishes to make any
remarks on any special point in those Articles, he should ask
leave to address the meeting. If no one asks to speak on any
special point contained in the Articles, then the whole of the
Articles will be considered as approved.

" I now call upon Sir Philip Lloyd-Greame, Delegate of
the British Empire, to speak."

Sir Philip Lloyd-Greame (British Empire) (speaking in
English) :

" I think the Conference will agree that the Transport Com-
mission has discharged its work in a comprehensive and
practical manner. The fact that the whole field has been
covered in so short a time was only possible because the
delegates and their associates recognized alike the import-
ance of the problem and the interdependence of their
transport systems ; and because they all brought to
their task a determination to co-operate in a common
endeavour.

" Anyone who studies these recommendations will see
that they are of a thoroughly practical character.

" Facilities for free transit by sea and land ; reciprocal
use and exchange of rolling stock ; the re-establishment of
direct international trains for passengers and goods ; the
operation of inclusive tariffs ; the use of a single waybill for
through transport ; the prevention of Customs delays, in so
far as they depend upon these arrangements ; the provision
of common frontier stations — all these are questions of an
essentially practical character, all of them questions which
might cause interminable delay if approached in a narrow
spirit, but susceptible of common agreement and common

12

178 The Genoa Conference

treatment, once they are tackled, as they have been here,
in a spirit of mutual co-operation.

" Not only has the Commission approached them hi that
spirit, but it has made sure that the Resolutions which it
has passed will be carried into effect, firstly, by the meeting
of the General Managers in Paris, and, secondly, by the task
which has been allotted to the League of Nations of watching
the progress which is made.

" I think this is a genuine attempt, commensurate with
the importance of the project. If the principles which have
been recommended by the Commission are carried out (as
I am convinced they will be, in view of the virtual unanimity
with which they have been accepted), we shall be well on
the way to restore the transport systems of Europe ; we shall
have taken a great step towards providing the essential com-
plement of the work which the Economic Commission is doing
in another sphere, and the practice of these precepts will
afford the surest guarantee for the credit and finance
which the Finance Commission has foreshadowed in its
report."

The President (speaking in Italian) :
" I call upon M. Peano, Delegate of Italy, to speak."
M. Peano (Italy) (speaking in French) :
" With regard to Article 2, the Italian Government wishes
to state that it is taking immediate steps to ratify the Barcelona
Convention."

The President (speaking in Italian) :

" As there are no other speakers, the whole of the Articles
contained in the Report of the Transport Commission are
considered as adopted.

" As the items on the Agenda are now exhausted, the
sitting will adjourn. But before doing so, I wish to express
my warm thanks to the Commissions which have worked
so excellently in accomplishing their task, and to their
Presidents who have presented the Reports in so admirable
a way. In my opinion, the work accomplished by these
Commissions offers the best proof that the work of this Con-

The Palazzo di San Giorgio again 179

ference will be productive of good results, and I feel sure that
I am expressing the opinion of you all in tendering the best
thanks of the meeting to the Commissions and to their
Presidents."
The meeting terminated at 12.30 p.m.

CHAPTER XI

THE RUSSIAN QUESTION

WE must now return to the controversy which naturally
overshadowed all others from beginning to end of
the Conference. Russia was the crucial problem in the task
of European pacification and reconstruction. If that could
be solved, others would present minor and superable difficulties.
The Cannes Resolution and the Report of the London Experts
had clearly stated the problem in its main aspect. The
reader should look back at the first three clauses of the Reso-
lution. It is there admitted that reconstruction in Russia
cannot be effected without the aid of foreign capital. But
before that resource can be available, foreign investors must
be assured that their property and rights will be respected
and the fruits of their enterprise secured to them. This in
turn cannot be unless Russia honourably recognizes her debts
and other obligations and establishes a reliable system of
jurisdiction. These were the three sections of the Resolution
which came within the purview of the First or Political Sub-
Commission.

The London experts had stated the problem in corresponding
terms. " The economic restoration of Europe," says the pre-
amble to that document, " is largely dependent upon her
(Russia) enlisting the support of foreign enterprise and capital.
Without a considerable transformation of the prevailing condi-
tions which affect particularly trade and industry foreigners will
be reluctant either to return to their former undertakings
or to start fresh undertakings. So long as precarious and
unstable conditions continue, only speculators will be willing
to venture on trade, and there is fear that the chief result

180

The Russian Question

would be not the reconstruction but the exploitation of Russia
and the Russian people, which it is the purpose of the
Governments represented at Genoa to avoid."

There can be no question that the postulate about Russia's
need for capital was fully accepted by the Russian delegates.
They had come to Genoa for " cash " in the form, not of
credits to foreign exporters, but of loans from Government
to Government. They were not minded to go back to Moscow
saddled with a burden of debt greater than Russia bore in
the Tsarist days, coupled only with the permission to buy
foreign goods. Petrograd and Moscow would erect no arches
of welcome home to delegates returning with such spoils. In
fact, as was pointed out, I think, by a Russian leader, while
the statesmen of other countries might stand to lose their
offices in case of unsatisfactory conduct at Genoa, the Russian
delegates might very well lose their heads for similar short-
comings. The Russian delegates had the best of reasons for
driving a good bargain in the Italian city and their chaffering,
in its persistency and ingenuity, was truly oriental.

In return for financial help Russia was asked to acknowledge
her liability in three categories :

(1) The pre-war obligations of the former Russian Govern-
ment and other public bodies, contracted principally to French
investors, mostly of small means (the " petits porteurs " of
Russian bonds).

(2) Debts contracted during the war, amounting to over
six hundred million pounds sterling, not counting accrued
interest. Six-sevenths of this debt are owing to Great Britain.

(3) Compensation or restitution due to individual foreigners
for damage done to their property during the Soviet regime
by its act or negligence. Belgium had the largest claim on
this liability, which was estimated at a figure between two
hundred and four hundred million pounds sterling. That
country had taken a leading part in the exploitation of Russian
resources, especially in the sugar, iron and timber industries.

The original position taken up by the Russian delegates in
regard to the first category was that revolutionary Governments

182 The Genoa Conference

are not called upon to acknowledge the obligations of the
regime they have overthrown. History was ransacked for
appropriate and justifying precedents, from the French
Revolution to the latest coup d'etat in Portugal. This rigid
attitude was not persisted in throughout the negotiations.
I heard M. Rakowski express a particular solicitude for the
small French bond-holder, to whose claims he asserted that
Russia would give preference and priority.

But in the earlier phases of the discussions this claim dis-
appeared on other grounds. Whether Russia was in justice
responsible for Tsarist debts or not, these were subject to an
enormous counter-claim which Russia put in on account of
damage caused by the assistance the Allies had rendered to
Generals Wrangel, Denikin and Koltchak, the anti-revolu-
tionary leaders. I have already referred to this remarkable and
unexpected little invoice which ran up to five thousand
millions sterling and left Russia a big creditor, even if she
had accepted and paid all her debts under the three headings.

As regards the second of these categories, the Russian reply
was ingenious and not without point. England had, indeed,
lent Russia money to wage the war. But Russia, having served
the Allied cause well for many months, had retired from the
conflict and consequently from all the material advantages
of the victory. I stood beside M. Rakowski as he expounded
this theory in cool and lucid French one afternoon in the
Hotel de Genes. As repeated in official discussions, the
argument was not taken " lying down." It was pointed out
that the Treaty of Brest-Litovsk, by which the Russians
quitted the struggle, had meant a great injury to the Allies,
for example, in the loss of material supplies which had fallen
into the hands of the Germans. But I think it was generally
felt that the Russians were on their strongest ground in their
protest against the claims under this heading.

Those under the third category aroused interminable
and crucial controversies, involving at one point the very
existence of the Anglo-French Entente. The issue can be
briefly described. All private property in Russia had been

The Russian Question 183

nationalized under the revolutionary regime which was
established hi 1917. Property in mines, factories and other
enterprises held by foreigners in Russia shared the same fate.
To consent to the restoration of full proprietary rights, the
" dominium " of Roman law, would have been for the Russian
Government to recant the main principle of the Communist
revolution. For foreigners to insist on such restoration of
title meant a challenge to the revolution and to the sovereignty
of the Russian State.

But if integral restitution was impossible consistently with
revolutionary doctrines, there might be compensation in
various forms. The principles of " use " and leasehold
tenure could be called in aid. So long as a man has full enjoy-
ment of a property and is able to sell or otherwise transfer it
at will, it cannot be a very serious matter whether he holds
in fee simple or on a lease for 999 years. The distinction
would mean little to him, but for the Russians it involved
the economic foundation of the Soviet system.

In fairness one ought also to add that France and Belgium
took up their stand on behalf of full restitution because of
the ulterior implications of consenting to any compromise.
To accept a title inferior to what was originally enjoyed
meant, according to this view, an acquiescence in Bolshevik
confiscations and a virtual recognition of Soviet principles.
Mr. Lloyd George and the British Delegation were prepared
to accept reasonable compensation for property in respect of
which restitution on the old terms was impossible. France
and Belgium dissented and, as we shall see, this difference was
never reconciled.

If the reader will turn back to the Cannes Resolution he
will find a clause therein which has a definite bearing on this
problem. Number i reads thus :

" Nations can claim no right to dictate to each other
regarding the principles on which they are to regulate
their system of ownership, internal economy and govern-
ment. It is for every nation to choose for itself the
system which it prefers in this respect."

184 The Genoa Conference

Nothing could be clearer and more sensible. I remember
Mr. Lloyd George drew attention to this very important clause
on the first occasion on which he visited the Anglo-American
journalists in the University. He reminded us that this
clause had been settled and framed by three leading English,
French and Belgian jurists, Sir Cecil Hurst being the
Englishman.

Even as it stood in its sensible simplicity it embodied
an amendment in the original draft, which M. Barthou had
suggested. It was then accepted by France, though not by
Belgium, who continued to protest against this principle of
elementary liberalism. It was difficult to understand how
France could reconcile the line she afterwards took at Genoa
on the subject of private property in Russia with her endorse-
ment of this clause in the Cannes resolution.

But let no one suppose that the original Russian intention
was even to compensate the owners of this State-confiscated
property. At the Villa de Albertis, and in sporadic con-
ferences in the hotels and palaces of Genoa and Rapallo, the
Russian delegates discoursed ingeniously on this politico-
ethical question. They marshalled a formidable array of
historical examples in which the State had nationalized and
confiscated without any attempt to make good to the suffering
owners. Had not America freed the slave without com-
pensation to the slave-owner, whether foreign or American ?
[England had compensated when she abolished slavery in
her own Empire.] Among the more ingenious precedents
advanced by these Soviet logicians was the prohibition
legislation of the United States, by which valuable brewing
and other property was left high and dry, without com-
pensation given.

The Bolshevik reliance on precedent as a final justifica-
tion for this action or that was amusing and instructive.
One felt inclined to remark that there are many precedents
for murder and robbery — but that scarcely justifies such
crimes.

The private or informal conversations held at the Villa de

The Russian Question 185

Albertis on the Russian questions came to an end with a brief
statement to the Soviet delegates, worded thus :

" i. The creditor Allied Governments represented at
Genoa cannot admit any liability with regard to the
claims advanced by the Soviet Government.

"2. But in view of the serious economic condition of
Russia, such creditor Governments are prepared to write
down the war debts owing by Russia to them (by a per-
centage to be determined later) ; and the countries
represented at Genoa would be prepared to consider
not only the postponement of the payments of interest
upon financial claims, but also the remission of some part
of arrears of interest or postponed interest.

" 3. It must be definitely agreed, however, that there can

be no allowance made to the Soviet Government against :

" (a) Either the debts and financial obligations due to

foreign nationals, or

" (b) The right of such nationals with regard to the
return of their property and compensation for
damage or loss in respect thereof."

The offer made herein to " write down " the Russian war
debts imposed no great strain upon the creditor Powers other
than England, because six-sevenths of these debts are owed
to our country. On the main problem which we have just
been considering, this Note, it will be observed, is am-
biguous. Instead of return or compensation, the form of
words used in Clause 3 of the Cannes Resolution, we get
" return and compensation." Apparently full restitution is
demanded, plus any compensation due to injury.

The reader will pardon an aerial flight over the jungles and
quagmires of controversy which filled the intervals between
the drier and firmer spots of official pronouncement. On
April 20th the Russians sent their reply to the above Note :

" Russian Delegation, April 20th, 1922.
" Sir, — The Russian Delegation have carefully con-
sidered the proposals of the Allied Governments laid down

186 The Genoa Conference

in the Annex to the Minutes of April i5th, and have been
in the meantime in consultation with their Government
upon this subject.

" The Russian Delegation are still of the opinion that
the present economic condition of Russia and the circum-
stances which are responsible for it, should fully justify
the complete release of Russia from all her liabilities
mentioned in the above proposals by the recognition of
her counter-claims.

" However, the Russian Delegation are prepared to
make a further step towards finding a solution for the
adjustment of the differences, and to accept items I,
2 and 3 (a) of the above-mentioned Annex, provided

(1) that the war debts and the arrears of interest or
postponed interests of all debts are written down, and

(2) that adequate financial help is given to Russia, assist-
ing her to recover from her present economic state in the
shortest possible period. With regard to 3 (b), subject
to the above two stipulations, the Russian Government
would be willing to restore to its former owners the use
of property nationalized or withheld, or where this is
not possible, then to satisfy the just claims of the former
owners either by mutual agreement with them direct or
in accordance with arrangements, the details of which
will be discussed and agreed during the present Con-
ference.

" Foreign financial help is absolutely essential for
the economic reconstruction of Russia, and as long as
there is no prospect of this reconstruction, the Russian
Delegation cannot see their way to put upon their
country the burden of debts which could not be dis-
charged.

" The Russian Delegation wish also to make it clear,
although it seems to be self-evident, that the Russian
Government could not admit liability for the debts of
its predecessors until it has been formally recognized
de jure by the Powers concerned.

The Russian Question 187

" Trusting you will find the above proposals to be a
sufficient basis for the resumption of the discussion.
" I have the honour to be, Sir,

" Your most obedient Servant,

(Signed) " GEORGE TCHITCHERIN.
" The Rt. Hon. David Lloyd George, Prime Minister
of Great Britain, p.t. Villa de Albertis, Genoa."

We may note in this document that there is no further
insistence on the counter-claim ; that the question of the
Debt Commission and the Mixed Arbitral Tribunals (the
" Capitulations ") opened in the London Report has not
been reached ; that on the subject of private property the
word " use " is precisely employed in order to indicate the
sorts of beneficial tenure which the Soviet Government
would be willing to confer in place of full proprietorship. But
the recognition of debts, it will be seen, absolutely depends on
the giving of financial help and the de jure recognition of the
existing Russian Government.

It would be hard to say what de jure recognition precisely
means. The resumption of ordinary relations between Powers
recently at war naturally proceeds by three stages. First
comes the Peace Treaty and its ratifications. Then follows
an intermediate stage, in which commercial relations are
re-established with full access to courts on both sides, with
commercial agents to protect the trader, and diplomatic repre-
sentation in the form of charges d'affaires. Only after such a
period of probation would full ceremonial and diplomatic rela-
tions be resumed with ambassadors on both sides. The length
of time required for these stages depends on the satisfactory
character or otherwise of the second period. As a matter of
fact, a German Ambassador was not appointed in London until
twelve months after the Peace of Versailles. Apparently the
Russians meant " full " when they said de jure recognition, but
this could only be when the important outstanding questions
relating to debt, private property and the ordinary guarantees
of civil and industrial life had been settled.

CHAPTER XII

THE MEMORANDUM

RUSSIAN affairs were now back from the Villa de Albertis
to the First Sub- Commission, to which had been formally
referred the subjects comprised in the first three numbered
clauses of the Cannes Resolution. The impression made by
the Russian reply given in the last chapter was favourable.
The Note was regarded as furnishing a fair basis for discussion,
and a committee of experts was at once appointed to consider
it. This consisted of seven members, representing each of
the five Convening Powers, the Neutrals and the little Entente.
Holland and Czecho-Slovakia named the two last, and the
British member was Sir Laming Worthington-Evans.

This complicated controversy seemed now to be on a fair
road to settlement, but the optimists who at this time thought
and said so had not reckoned with Bolshevik mentality.

It proved to be difficult to tie the Russians down to any
clear and final statement on any subject whatever. Any
written document they issued was subject to comment and
interpretation which fairly embroiled once more all the ques-
tions at issue. Thus we enter upon another period of unedify-
ing chaffer and chatter from which it is a hard and thankless
task to construct any consistent narrative. Press and public
were not admitted to the meetings of the experts or of the
Political Sub-Commission. We were dependent on such
broken meats of information as Sir Edward Grigg or Mr.
McClure could spread twice a day on the large table in the
University Professors' room. The notes so taken suggest
in the retrospect a confused melee of advance and retreat,
of claim and counter-claim, of reproach and repartee, with
occasional flashes of humour and satire enlivening the scene.

188

189

There was a general agreement that Bolshevik dialectics
were of the East rather than the West. I believe it was the
British Prime Minister who suggested that the Oriental
carpet-buyer's tactics were most appropriate for dealing
with these people. The carpet-vendor places on his ware
an impossible figure which the would-be purchaser rejects
and so departs with an air of finality. The next day he passes
that way again and the merchant, now in a chastened mood,
resumes negotiations on a more moderate basis. And so at
last the contract is made and the customer gets his carpet
at a figure probably much less than the owner asked, but
greater than the price he had himself been willing at first
to pay.

The Bolsheviks fought their case with a sort of perverse
logic which sometimes resulted in amusing paradoxes. On
one occasion, M. Cattier, Belgian expert, asked the Russian
representatives about the restoration of foreign bank deposits
seized by the Bolshevik Government. M. Rakowski ex-
plained that these had been nationalized and therefore could
not be restored. Whereupon M. Cattier inquired what the
Bolshevik attitude would be towards Russian deposits in,
for example, Belgian banks, and received the unflinching
reply : " We should insist on their being paid to us, because
you have not nationalized them." Such an answer, delivered
by M. Rakowski in his " perfect parliamentary manner,"
was both irritating and amusing, as an attempt to make the
best of two antagonistic worlds.

Sometimes the cauldron itself would throw out morceaux

of intelligible information, such as the following brief report

of a statement made by M. Tchitcherin to the Allied experts :

" The principle of nationalization without indemnities

is a slogan dear to all Russian hearts. Our people believe

that private property is a form of privilege analogous to

the feudal rights which obtained before the French

Revolution or to the serfdom in Russia before the time

of the Tsar Alexander II. These ancient privileges having

been abolished, we wish the same to be done with private

190 The Genoa Conference

property. Upon this point we cannot give way. We
propose, with a view to smoothing away present diffi-
culties, a system which consists in giving to former
property owners rights of pre-emption or concession
or participation in mixed companies or trusts, but we
cannot contemplate any general indemnity.

" As regards the recognition de jure of the Soviet
Government, it is for us a question of commerce, for we
cannot hope to re-establish commercial transactions
without legal powers."

Behind the Russian Delegates were the Soviet Government
and the communist workpeople at Moscow and such a public
opinion as was represented by Russian newspapers. All
this sentiment was against the acceptance of any terms which
might seem to challenge the revolution and the sovereignty
of Soviet Russia. On one occasion the Russian Delegates
asked for time to communicate with Moscow, but M. Rakowski
deliberately stated, in answer to a question the present writer
asked, that the Russian delegates were full plenipotentiaries
and were only applying to Moscow for further information
on certain points.

One of the phantoms of this nebulous period was a certain
Russian memorandum in which the Bolsheviks had given
expression to their maximum, least compromising views.
This document was not officially put in, but at least on one
occasion the Russians threatened to return to the standpoint
it represented if a certain course of action was persisted in.
The character of this treatise may be gathered from the
assertion it contained that " ordinary international law is
not applicable to the work of the Russian Revolution " and
that the Russian Government accepted no obligation to give
even a preference to the ex-proprietors of the property it
had confiscated. But as a rule the Russians kindly intimated
that this Memorandum " represented their past rather than
their present views."

There might be different opinions about the political morality
of the Bolshevik Delegates, but there could be only one about

The Memorandum 191

their ability. They were quite capable of holding their own
with the most trained and experienced intellects of the West.
They had a happy and disconcerting knack of turning the
tables unexpectedly on their adversaries. A good example
of this was the letter addressed by M. Tchitcherin to Signer
Schanzer, President of the Political Sub-Commission, in
reply to a letter written by Signor Schanzer on April 27th on
the subject of Bolshevik misrule in Georgia.

The letter expressed the views of a meeting of Belgian,
French, Japanese, Rumanian, Swedish and Swiss delegates
held to consider the Bolshevists' ferocious repression of the
Georgian revolt against Lheir tyranny.

After questioning the competence of the meeting, M. Tchit-
cherin declared that no military operations of the kind suggested
had taken place in Georgia, and denied the accuracy of the
information supplied to the meeting. But he affirmed the
desire of the Bolshevists to do all in their power to put an
end to bloodshed and oppression, both in Europe and in Asia.

He, therefore, invited the delegates who attended the
meeting to give their most serious attention, not to imaginary,
but to real cases of bloodshed and oppression, such as those
provoked by the Japanese in the Far East, by the Poles at
Vilna and Eastern Galicia, by the Rumanians in Bessarabia, by
the Yugo-Slavs in Croatia and Macedonia, by the Greeks in
Thrace, by the French in the Saar Basin and in Tunis, by the
British in India and Egypt, or the Italians in Tripoli. He
concluded that the Bolshevist Delegation was ready to take
part during the Conference in a general examination of all
effective means to enable all oppressed nationalities freely to
determine their own fate.

The Conference was now getting into the trench stage,
and delegates and correspondents began to wonder whether
they were there " for the duration." The King of Italy
paid at this time a ceremonial visit to the Conference. His
arrival in the battleship Dante A lighten was a pretty sight
from the balconies of the Albergo dei Giornalisti. As the
procession of grey destroyers followed by the great vessel

192 The Genoa Conference

glided over the blue water into the harbour, the warship
which had been anchored off the Pier since the Conference
opened greeted the monarch with the flash and smoke of
a ceremonial salute. The meeting of an old-fashioned monarch
like King Victor Emmanuel and a new-fashioned monarch,
or tyrant as some would describe him, representing the
latest Revolution on a large scale, was likely to have novel
and amusing features. I was not present at these festive
rencontres, but the correspondent of the Times did justice
to them. " The sight of M. Tchitcherin," he wrote, " top-
hatted, in faultless morning coat, and a red flag in his button-
hole, boarding an Italian battleship, conversing amiably with
King Victor Emmanuel, drinking champagne, clinking glasses,
and exchanging signed menus with the worthy Archbishop of
Genoa, to whom he descanted on the idyllic freedom enjoyed
by the churches of Russia, was a spectacle incomparable and
indescribable in prose." What the " grimly-smiling " poet
from whom the vessel was named would have thought of
such scenes and how he would have distributed his bans and
blessings must be left to the imagination.

Since the Russian Note of April 20th the scope of the dis-
cussions had been enlarged and the Bolshevists had been
invited to consider the first seven points of the London Experts'
Report, which included the proposal of the Russian Debt
Commission and the Mixed Arbitral Tribunals, the latter of
which were to determine the compensation to be given for the
losses inflicted on foreigners in Russia by the action or negli-
gence of the Soviet Government. On April 24th the Russians
presented counter-proposals to these seven articles. A copy
of this document was not available but its character may be
briefly described. It was generally irreconcilable with the
Cannes Resolutions and with the letter, already given, addressed
by M. Tchitcherin to Mr. Lloyd George. Two points only
were definite — one establishing the right of the Bolshevists
to " immediate and adequate financial aid " as well as to de
jure recognition ; and another demanding the restitution to
the Bolshevists of all property held by them abroad, such as

The Memorandum 193

jewels, real estate and ships, and the fulfilment of the financial
obligations of Allied nationals towards the Russian Govern-
ment. Besides, the Bolshevists demanded that the Allied
Powers should give the Bolshevists all the necessary assistance
in this respect and should permit the examination of bank
accounts in Allied countries.

The presentation of this impracticable thesis brought matters
to a crisis and from this tune we began to hear of the prepara-
tion of an " ultimatum " or at any rate a definite and very
understandable memorandum to the Russians, who would
have to accept or reject it. By this means the flood of futile
controversy would be stanched and some sort of decision
reached. But the formulation of this Memorandum at once
emphasized the differences of opinion among the Allies. The
document was to consist of a Preamble stating what the
Governments were prepared to do for Russia, followed by a
series of Articles declaring what Russia must do in return.
Two competing drafts, the Anglo- Italian and the Franco-
Belgian, quickly took shape. It became necessary to appoint
a committee to harmonize these conflicting views into a single
acceptable draft. A small committee was chosen to accom-
plish this task. Sir Philip Lloyd-Greame represented England,
M. Barrere France, M. Motta Switzerland, M. Delacroix Belgium.

The Preamble was a lesser difficulty than the Articles, but
two drafts of this were also in competition. In Mr. Lloyd
George's opinion the Franco-Belgian version was vague and
theoretical, while the British was practical and positive. The
one might be likened to the froth on a pot of beer, the other
to the more substantial liquid below. But the main point
in controversy was the question of private property, and
how the Russians were to make good to the former owners.
This became the subject of Clause 7, over which a tremendous
battle of the wits and interests took place. Belgium was now
the obstacle and the danger. Russia's debt to her was only
a fraction of what Russia owed to England, but Belgian
private property in Russia before the war had reached the
respectable figure of £140,000,000, and this gave her a special

13

194 The Genoa Conference

interest in Clause 7. M. Jaspar, Belgian Foreign Minister,
was far from being satisfied with the British draft. In vain
Mr. Lloyd George counselled acquiescence. He pointed out
that Article 7 had been constructed by a Committee of Jurists
on which Belgium had had a representative, M. Cattier, a
great jurist and banker.* They must not go beyond the
Cannes Resolution, which said the Russians must " either
restore or compensate." The amendment proposed by
M. Jaspar would not afford this option, but would compel
complete restoration where the property was still in existence.
This was pressing intervention beyond the limits of possible
acceptance by any sovereign State. We should be asking
more of Russia than we had asked of Czecho-Slovakia or
Rumania, which countries had passed some rather severe
nationalizing legislation. The British Prime Minister pointed
out that the clause as drafted by the Jurists to whom that
duty had been allotted was approved by all the business
men on the British Delegation.

Mr. Lloyd George repeated these views through the lips
of Sir Edward Grigg or Mr. McClure. If we had made up
our minds, he said, not to negotiate with Bolshevik Russia,
then the whole question fell to the ground, and the cause of
peace and revival was indefinitely set back. But if we did
propose to treat with the representatives of one hundred and
twenty million people, it was no use offering terms which
there was no chance of their accepting. It was no use chal-
lenging the whole principle of the Russian revolution. If
the Soviet Government was willing to compensate fully in
other forms for the property of foreigners which it had
nationalized and of which by virtue of its own principles it
could not restore the full legal ownership or " dominium,"
then we ought to be contented with that, if the Russians
would accept our other conditions.

All this was excellent sense, but it failed of the desired
effect upon the Belgian Delegation, which had the support

* M. Fromageot represented France and Sir Cecil Hurst England on this

Committee.

The Memorandum 195

of France. A suggestion by M. Barthou that the words of
Clause I in the Cannes Resolution should be incorporated
in the Article was adopted and carried, on condition that
the document might be transmitted to the Russians at once.
It was understood that France approved the Article so
amended. But Belgium remained intransigent, insisting on
a principle quite inconsistent with the Cannes decision on the
subject.

Some of the starch in the Belgian stiffness was perhaps due
to the rumours prevalent at this time that Russia had been
granting away to foreign interests oil properties formerly
belonging to Belgian nationals. Oil magnates turned up in
Genoa at this time. In fact, the Conference for a time reeked
of oil, the infusion tending to chafe rather than to calm the
troubled waters. It turned out that negotiations had been
going on with regard to such concessions, but had been stopped
during the Conference, and no contracts had been signed.
But the Belgians were not easily reassured.

It was at this point (May 2nd) that M. Barthou left Genoa
to consult his Government in Paris. Returning on May 6th,
he informed Mr. Lloyd George in the course of the famous
interview with that statesman that the French Government
was much impressed by the Belgian attitude on the subject
of private property in Russia, and that French public opinion
ran strongly the same way. His instructions were not to
give the final French approval to the document containing
Clause 7 until Belgian approval was also given.

But by this time the Memorandum was in the hands of
the Russians, and it may now be placed under the eyes of
the reader, who will be able to appreciate its significance.
His attention is particularly invited to the much-controverted
Clause 7 :

" Mr. Vice-President, — I have the honour to transmit
to you the enclosed document.

" I have to add that the French Delegation defers its
final approval of the enclosed document until it has
received instructions from its Government.

13*

196 The Genoa Conference

" Please accept, Mr. Vice-President, the assurances
of my highest consideration.

(Signed) " F. SCHANZER.

" Mr. George Tchitcherin, Vice-President of the
Russian Delegation, Hotel Imperial, Rapallo."

" The problem of the restoration of Russia, with a view
to the re-establishment of peace over the whole of the Con-
tinent of Europe, has been considered in the most serious and
sympathetic manner. There is a general and sincere desire
that friendly relations should be restored among all the
nations, and that the Russian people may take its historic
place among the European Powers.

" Russia in the past has been an important element in the
economic system of Europe. But to-day her exhaustion is
complete after the events which have drained her resources
for the last eight years, and her elimination from the European
economic system has added to the troubles from which the
world is suffering.

" Every year the world deficiency in food and raw material
due to the failure of Russian supplies is being made up from
other sources.

" In due course, the gap would be filled so far as the rest
of Europe is concerned, for trade, like water, finds new channels
when the older channels are blocked. But in Russia itself,
privation, misery and famine would continue to spread,
and thus constitute a plague spot of increasing menace to the
European system. Such a fate for Russia and for Europe
the Powers are deeply anxious to avert.

" The reconstitution of Russia must take place, above all,
in the interests of Russia herself. But Russian prosperity
cannot be revived without the assistance of the capital and
the commercial experience of the West. As soon as the
feeling of security has been revived in Russia, that is to say,
when the nationals of foreign countries have guarantees that
they can resume their former industrial or commercial and
agricultural undertakings, and start new ones, with the

The Memorandum 197

certainty that their property and their rights will be respected
and the fruits of their enterprise secured them, they will hasten
to afford Russia the benefit of their technical knowledge, their
work and their capital.

" Russia is a country of great possibilities. Economic
disaster has paralysed, but has not destroyed, her resources.
If Russia and the Russian people are to recover, the resources
of Russia must be developed. Her agriculture, which is
fundamental to her economic system, must be restored ; her
mines must be reopened, and her factories must be set to work
again. The other nations of the world played a great part
In the development ot Russia. They will play that part
again as soon as Russia establishes conditions which com-
mand their confidence.

" The needs of Russia are so manifold, that they can only
be met by once more throwing open the Russian market to
foreign manufacturers and traders. To-day Russia is
urgently in need, not only of food and clothing, medical
supplies and other necessaries of normal existence, but also
of locomotives, wagons, agricultural implements, tools,
machinery and port appliances. If these goods are not
supplied to Russia, her transport system will fall to pieces,
her industries will rapidly become derelict, and the yield from
the land will steadily fall.

" All these supplies can be furnished by the industrial
countries. As soon as security in Russia has been re-estab-
lished for former owners and debts are recognized, the importa-
tion of these necessaries will recommence. Capital will flow
into Russia the moment confidence begins to revive. And
at the same time foreign enterprise and experience will be
available for the reconstruction of the country.

" There is not a country which is unable to render an effec-
tive contribution to the work of reconstructing Russia : some
by financial help, others by the rapid resumption of the manu-
factures or public utility undertakings which they owned
there ; and still others, by the skilled workers which they
will be able to send there. All the countries represented at

198

Genoa have indicated their willingness to co-operate in this
work, each according to its capacity.

" Their Governments also are ready to hasten this restora-
tion. It will be necessary to overcome the hesitation on
the part of business men, who will fear the loss of capital
which they might sink in a county thus deprived for the time
being of the normal means of production. As soon, however,
as the first pioneers have succeeded in their enterprise, others
will follow in their footsteps. The object and the justification
of Government assistance will be to make these first attempts
succeed.

" Measures have already been taken in several countries
for this purpose, and Russia will be able to obtain the benefit
of these measures as soon as it is possible to conclude with
Russia an arrangement in conformity with the clauses which
follow.

" Several countries of Europe have decided to establish
an international corporation with an initial capital of
£20,000,000. Its aim is to finance reconstruction and deve-
lopment undertakings in Europe which, without assistance,
would have difficulty in procuring the necessary funds. This
sum may seem small in comparison with the magnitude of the
work to be done. But it only includes the capital subscribed
through the national companies formed in the leading coun-
tries. Behind it stand the resources of all these countries,
resources which aiv available for financing operations approved
by the international corporation.

" In addition to this, certain countries are in a position to
advance immediately substantial sums to those of their
nationals who will trade with Russia, or settle there for that
purpose. To these facilities must be added the private credits
which manufacturers, who have the assurance that their
undertakings can be successfully resumed in Russia, will
not fail to receive from the national banks.

' The British Government can guarantee under the Trade
Facilities Act the capital or interest required for capital
undertakings, overseas as well as at home, to develop economic

The Memorandum 199

reconstruction in Europe. If the Soviet Government is
prepared to take the steps needed to encourage enterprise,
then this Act can be applied to Russia. The sum authorized
by this Act was £25,000,000. If necessary, Parliament will
be invited to increase the amount to be made available.

" In addition to the facilities offered by this Act, there is an
Export Credits Scheme for financing the export of British
goods. Under this scheme, the British Government is
authorized to guarantee transactions up to £26,000,000.
Of this £26,000,000, £11,000,000 has been pledged. The
British Government will be prepared to invite Parliament to
extend the duration of the Act in question.

" France, by reason of the effort which she is obliged to
make in order to restore her own devastated regions, cannot
at this moment afford direct financial assistance for the
reconstruction of Russia. Nevertheless, the French Govern-
ment accepted at Cannes the principle of taking a part in the
International Corporation equal to the English part.

" France can send to Russia seeds of all sorts. Negotiations
have already taken place with the Soviets on this subject.
Detailed plans have been prepared for the dispatch and use
of tractors. Several thousands of these tractors could be
sent with the necessary technical personnel. Machines and
technical personnel can be sent in order to establish veterinary
stations and institutions for agricultural study.

" With regard to transport, France can offer rolling stock
of approximately twelve hundred locomotives, twenty-five
thousand goods wagons, three thousand five hundred railway
carriages and vans. It would be possible to form a special
company for undertaking repairs, and repair shops could
be let to the company which would supply the technical
personnel.

" Finally, French industrialists, who in great numbers
have contributed to the wealth of many parts of Russia,
would be able to re-start their establishments as soon as
they received the necessary guarantees. These industrialists
would undoubtedly find in France or abroad, thanks to the

200 The Genoa Conference

confidence which they inspire, the necessary capital and the
technical staffs which will be needed.

" Italy, by subscribing twenty per cent, of the capital of
the International Corporation, purposes to render substantial
financial help as regards both the immediate aims of this
organization and its future development. She is also ready
to support every undertaking which is set up in order to
re-establish transport by rail or water, and to foster the
marketing of Russian produce. She is also ready to contribute
through her agricultural organizations and by her experience
to the restoration of agriculture, and to participate in co-opera-
tion with Russia in the industrial and agricultural re-equip-
ment of the country.

" Offers of help are also held out by Japan. The Japanese
Government, with a view to encouraging trade with Russia,
have granted a credit of eight million yen to the Russo-
Japanese Trading Company. The Japanese Government
has also the intention of taking further measures, if it deems
it necessary, with the object of furthering trade relations
between the two countries.

" Time is an indispensable factor in the reconstruction of
Russia, but the important thing is to make a start. As soon
as the first impulse has been given, as soon as the first pioneers
have been able to settle in Russia, and to make known the
fact that they have been successful, and have demonstrated
to themselves and their compatriots that the way which had
been closed for so long is open and safe, others will follow, and
their number will be all the greater because the road has been
barred so long.

" In these circumstances, the following conditions, dealing
with the more important questions requiring adjustment, are
submitted to the Russian Delegation by the Delegations of
Italy, France, Great Britain, Japan, Poland, Rumania,
Switzerland and Sweden, represented on the Sub-Committee
of the First Commission. The final approval, however, of
the French Delegation is reserved until it receives its instruc-
tions from. its Government.

The Memorandum 201

CLAUSE I

" In accordance with the terms of the Cannes Resolution
that all nations should undertake to refrain from propaganda
subversive of order and of the established political system
in other countries than their own, the Russian Soviet Govern-
ment will not interfere in any way in the internal affairs, and
will refrain from any action which might disturb the territorial
and political status quo in other States. It will also suppress
all attempts in its territory to assist revolutionary movements
in other States.

" The Russian Soviet Government will use all its influence
to assist the restoration of peace in Asia Minor, and will adopt
an attitude of strict neutrality between the belligerent parties.

CLAUSE II

" (i) In conformity with the Cannes Resolution, the
Russian Soviet Government recognizes all public debts and
obligations which have been contracted or guaranteed by
the Imperial Russian Government, or the Russian Provisional
Government, or by the Soviet Government itself towards
foreign Powers.

"Being desirous of facilitating the immediate reconstruction
of Russia and the rehabilitation of her credit, the creditor
Powers are willing to make no claim upon Russia at present,
either as to capital or interest, for the repayment of the
advances made to the Russian Governments during the war.

" (2} The Allies can admit no liability for the claims against
them set up by the Russian Soviet Government for loss and
damage suffered during the revolution in Russia since the war.

" (3) When an arrangement is concluded between the
Allied and Associated Powers for the liquidation or rearrange-
ment of war debts, the Allied Governments concerned will
submit to their Parliaments measures for reducing or modify-
ing the amount due by the Russian Soviet Government on
similar lines, and with due regard to the economic and
financial condition of Russia ; but these measures will be

202 The Genoa Conference

conditional on the renunciation by Russia of the claims
mentioned in paragraph 2.

" (4) Where responsibility for liabilities contracted b}r the
Russian Soviet Government or its predecessors towards
foreign nationals has been assumed by a foreign Government,
the liabilities will be treated on the same footing as private
debts in accordance with Clause IV.

" (5) The provisions of this clause will not apply to balances
standing to the credit of a former Russian Government in any
bank situated in a country of which the Government made
advances to a former Russian Government, or assumed
responsibility for any Russian Government loan floated in
that country between August ist, 1914, and November yth,
1917. Such balances shall, without prejudice to the rights of
third parties, be transferred to the Government concerned. The
liability of the Russian Soviet Government in respect of war
debts shall be pro tanto reduced.

CLAUSE III

" All financial claims by other Governments upon the
Russian Soviet Government, and by the Russian Soviet Govern-
ment upon other Governments, excepting those dealt with in
these clauses, shall, subject to any special arrangement which
may be made, remain in suspense until the agreement referred
to in Clause II., paragraph 3, has been concluded. The claims
shall then be extinguished.

" Nevertheless, this claim shall not apply to claims on
behalf of the nationals of other Powers on account of the
action in Russia of the Russian Soviet Government, or to
claims on behalf of Russian nationals on account of the action
in other countries of the Governments of those countries.

CLAUSE IV

" In conformity with the general principle admitted by all
Governments, the Russian Soviet Government recognizes its
obligation to fulfil the financial engagements which it or its
predecessors — that is to say, the Imperial Russian Government

The Memorandum 203

or the Provisional Russian Government — have contracted
vis-d-vis foreign nationals.

CLAUSE V

" The Russian Soviet Government undertakes to recog-
nize, or to cause to be recognized, the financial engagements of
all authorities in Russia, provincial or local, as well as all public
utility enterprises in Russia contracted before this date vis-d-vis
the nationals of other Powers, unless at the time when the
engagement was contracted the territory hi which the
authority or enterprise was situated was not under the control
of the Russian Soviet Government, or of the Russian Provisional
Government, or of the Russian Imperial Government.

CLAUSE VI

:' The Russian Soviet Government agrees to conclude an
arrangement within twelve months of the coming into force
of this Clause with the representatives of foreign holders of
bonds and bills issued or guaranteed by the Russian Soviet
Government or its predecessors, for ensuring the re-starting
of the service of the loans and the payment of the bills. This
arrangement will cover terms and dates of payment, including
remission of interest, so that adequate account may be taken
both of the actual conditions in Russia and of the necessity
for her reconstruction.

" The said arrangement shall apply as far as possible to
all foreign holders without distinction of nationality.

" In case a collective agreement cannot be reached, the
benefit of an arrangement concluded with any particular
group may be claimed by all other foreign holders.

"If no such arrangement as is referred to in paragraph I
can be concluded, the Russian Soviet Government agrees to
accept the decision of an Arbitration Commission. This
Commission shall consist of a member appointed by the
Russian Soviet Government, a member appointed by the
foreign holders, two members and a President appointed
by the President of the Supreme Court of the United States

204 The Genoa Conference

or, failing him, by the Council of the League of Nations or
the President of the Permanent Court of International Justice
at The Hague. This Commission shall decide all questions as
to the remission of interest and as to the mode of payment
of capital and interest, and will take into account in so doing
the economic and financial condition of Russia.

" The procedure laid down in this clause as to Russian
Government bonds and bills shall also be applied in the case
of the financial obligations referred to in Clause V.

CLAUSE VII

" In order to encourage the re-starting of foreign economic
activity in Russia, and to permit foreign States to furnish
to Russia the aid indicated above in the introduction, and
thereby to facilitate the restoration of the country, the Russian
Soviet Government accepts the following arrangement with
respect to private property.

" Without prejudice to its freedom, as recognized in the
Cannes Resolution, to regulate its system of ownership,
internal economy and Government, and to choose for itself
the system which it prefers in this respect, the Russian Soviet
Government recognizes its obligation, in accordance with the
said Resolution, to restore or compensate all foreign interests
for loss or damage caused to them when property has been
confiscated or withheld.

" In cases in which the previous owner is not enabled to
resume possession of his former rights, the Russian Soviet
Government will make an offer of compensation. If no agree-
ment is come to between the previous owner and the Russian
Soviet Government as to the nature and amount of the com-
pensation, the previous owner shall be entitled to submit to
the Mixed Arbitral Tribunal referred to hereafter the question
whether the compensation offered by the Russian Soviet
Government is just and adequate.

" If the Mixed Arbitral Tribunal decides that the com-
pensation is just and adequate, it must be accepted by the

The Memorandum 205

previous owner ; but if the Tribunal decides that the com-
pensation is not just and adequate, and the Russian Soviet
Government and the previous owner are still unable to reach
an agreement as to the compensation, the previous owner
shall receive from the Russian Soviet Government a grant of
the enjoyment of the property on terms not less favourable in
all matters relating to its use and disposition than the rights
he previously possessed ; provided, however, that where
the Mixed Arbitral Tribunal decides that the grant of the
enjoyment of the property is impracticable, and that com-
pensation must be given, the amount, if not agreed, shall be
fixed by the Mixed Arbitral Tribunal and shall be payable
in bonds.

" In cases in which the Russian Soviet Government cannot
give back the property, it shall not be entitled to hand it over
hereafter to other parties. If the Russian Soviet Govern-
ment proposed at a later date to hand it over as above, a
preference shall be given to the previous owner.

"If the exploitation of the property can only be ensured by
its merger in a larger group, the preceding provision shall
not apply, but the previous owner shall be entitled to
participate in the group in proportion to his former rights.

" The term ' previous owner ' shall include Russian financial,
industrial and commercial companies, which at the date of
nationalization were controlled by nationals of other Powers,
or in which at the same date such nationals possessed a sub-
stantial interest (either as shareholders or bondholders), if
the majority of the foreign interests so desire. It shall also
include a foreigner entitled to the beneficial use of property
in Russia which was vested in a Russian nominee.

" In cases in which a claim is not put forward in virtue of
the preceding paragraph, a claim for compensation in con-
formity with this clause may be put forward by any foreign
national interested in a Russian company in respect of injury
or loss suffered by the company.

" In the settlement of claims and in awards of compensation
in respect of private property, provision shall be made for

206 The Genoa Conference

the protection of claims which third parties possessed against
the property.

" In cases where damage has been done to the property
in consequence of the action or negligence of the Russian
Soviet Government, compensation in accordance with the
principles of international law shall be assessed by the Mixed
Arbitral Tribunal.

CLAUSE VIII

" Provision shall be made by the Russian Soviet Govern-
ment for enabling foreign nationals to enforce their claims
against private persons in Russia.

" If the payment of the sums due has been rendered impos-
sible by the action or negligence of the Russian Soviet Govern-
ment, the liability must be assumed by that Government.

CLAUSE IX

" Pecuniary compensation awarded under Clause VII. will
be paid by the issue of new Russian five per cent, bonds for
the amount fixed by the Mixed Arbitral Tribunal.

" The terms as to the payment of interest on these new
bonds, and the terms as to their amortization, shall be similar
mutatis mutandis to those for old bonds as fixed by the Arbitral
Commission referred to in Clause VI.

CLAUSE X

" Mixed Arbitral Tribunals shall be appointed for each
country to decide questions as to the compensation to be paid
under these clauses. These Tribunals shall consist in respect
of each country of one member appointed by the Russian
Soviet Government, one member appointed by the Govern-
ment of the national concerned, and a President appointed
by the President of the Arbitral Commission referred to in
Clause VI.

CLAUSE XI

" The re-starting in the shortest possible time of enter-
prises of all kinds which belonged to foreigners before the
events of 1917, and the establishment of new enterprises

The Memorandum 207

being of the greatest importance for the rapid reconstruction
of Russia, the Russian Soviet Government undertakes to
take all necessary measures for ensuring forthwith the pro-
tection of the person, the property and the labour of foreigners.
" For this purpose the administration of justice in Russia
shall be provided for as set out in Article 8 of the Recom-
mendations of the Experts in London, and foreigners shall be
allowed to reside and trade in Russia in accordance with the
provisions of Articles 9-17 of the said Recommendations.

CLAUSE XII

" Special arrangements will be made in agreement with the
Russian Soviet Government for the settlement of questions
relating to the liquidation of pre-war contracts between
Russian nationals and foreigners, and questions relating to
prescriptions, limitations and foreclosures.

CLAUSE XIII

" The Russian Soviet Government will restore to the
Rumanian Government the valuables deposited at Moscow
by the said Rumanian Government.

" Genoa, May 2nd, 1922."

Such were the proposals the Soviet Delegation was invited
to study. At Genoa there followed a period of relaxation,
during which delegates and Press awaited the Russian answer,
speculated on its character, and perspired in the hot weather
which had now set in.

CHAPTER XIII

THE REPLY

DURING the interval of waiting for the Russian response
to the Memorandum of May 2nd, the atmosphere was
kept moving by the breeze, or rather the gale, that still blew
as the result of the inaccurate reports of the Lloyd George-
Barthou interview. We have already dealt sufficiently with
that incident. The interval was also employed by the smaller
States to ventilate their grievances and desires. All manner
of subjects were considered by the five convening Powers
to whom these appeals were made. The question of typhus
on the borders of Russia ; the Eastern Galician and Lithuanian
questions ; Hungarian representations concerning the pro-
tection of Hungarian minorities in the Succession States ;*
a letter from the Bulgarian Delegation raising the question of
access to the ^Egean, of the protection for minorities, and
asking for international credits ; a complaint from Angora
that that Government had not been asked to send delegates
to the Conference ; representations on various subjects from
the anti-Soviet Ukraine Government sitting in Paris, which
contested the right of the Russian Soviet Delegation to repre-
sent Ukraine, and from Georgia, Aserbiajan and Armenia,
the last applying for a credit of five million gold francs ;
a protest read from representatives of the Saar Valley popula-
tion ; and, last, but not least interesting, a memorandum
presented on behalf of the Vatican, asking that the questions
of freedom of worship, of religious instruction and of religious

* States largely constructed out of the material of the old Austro-Hun-
garian Empire.

208

The Reply 209

property in Russia should be considered by the Con-
ference.*

Some of these questions, such as the Ukrainian appeal, were
obviously outside the scope of the Conference. This was the
view taken by M. Barthou of the Galician and Lithuanian
questions. But Mr. Lloyd George, who in the speech at the
Ristorante Olimpia and others had insisted on the danger
to European peace involved in these frontier questions,
thought they were covered by Clauses 2 and 3 of the Cannes
Resolution. He was supported, as so often, by the Italian
Delegation, and it was agreed that they should be raised in
the First or Political Sub-Commission, though M. Barthou
reserved the right of protesting against their being carried
to the Plenary Conference.

Sympathetic ears were lent to the Hungarian plaint. It was
felt that Hungary, which had a fully official delegation in the
Conference, had been rather left out in the cold,f and it was
agreed that its representatives should be heard in the First
Sub-Commission. The same favour was extended, at Mr.

* The following statement was published in the Times of June yth :
Mgr. Pizzardo, Assistant Secretary to the Secretary of State of the Vatican,
arrived in Genoa on May gth, and handed to the President of the Conference,
Signer Facta, a memorandum in which it was requested that, in the eventual
agreement of the Powers with the Bolshevist Government, the following three
clauses should be inserted :

1. Full liberty of conscience for all, both Russian citizens and foreigners,
is to be guaranteed in Russia.

2. The private and public work of any religious cult is also guaranteed.

3. The property which belonged, or still belongs, to any religious body,
whatever it be, will be restored and respected.

On the following day Mgr. Pizzardo was informally advised to withdraw
the third clause, because it was remarked that this clause might prove dan-
gerous to the course of the negotiations if it meant the restitution of the
property s while it was superfluous if it aimed at having the religious
properties included in the general negotiations which were going on with
regard to the private properties of all foreigners in Russia. Mgr. Pizzardo
telegraphed at once to the Vatican, and, having received the authorization
of the Secretary of State, withdrew the third clause.

| The reader is reminded, however, that it was one of the rules of the
Conference that any Power not directly represented on any Sub-Commission
might claim to be admitted to any debate on any subject in which it was
especially interested.

14

210 The Genoa Conference

Lloyd George's request, to Bulgaria, whose Prime Minister
and chief delegate, M. Alexandre Stambulinski, it was recalled,
had opposed the Bulgarian declaration of war against the
Allies, and on that account had been imprisoned by King
Ferdinand.

As regards the complaints from Angora and some other
non-European States that they had not been invited to the
Conference, the subject was dismissed, as these were Asiatic
States, and therefore not directly concerned with European
problems.

The Pope's message aroused some discussion. His Holiness
had already written two sympathetic and inspiring letters on
the Conference,* of which he was known to be a sincere well-
wisher. The message from the Vatican was accorded, there-
fore, the most regardful consideration. It was agreed that
the subject of religious properties in Russia lay outside the
purview of the Conference, but M. Barthou thought the ques-
tions of religious freedom and religious education mignt be
taken up. Mr. Lloyd George then pointed out that these were
very controversial terms, and that the five Powers in Committee
had probably five quite different ideas on the subject and five
different systems of religious instruction. He spoke probably
from a painful reminiscence of British politics when he said
that religious education was a subject of bitter conflict every-
where. Could there be any satisfactory or intelligent agree-
ment on the subject until the facts relating to Russia were
known ? In reply to M. Jaspar (Belgium), who pressed for
action, he said he could not understand what action the
Powers could take without an unjustifiable interference in the
internal affairs of Russia. It was agreed at last that the letter
should be read and noted by the First Sub-Commission, out
of respect not only for the Holy See but personally for its
present occupant.

The relations between the Vatican and the revolutionary
regime in Russia formed one of the many subjects of rumour

* One in its English translation has already been given. The second,
of April agth, also in English, is reproduced in Appendix VI.

The Reply 211

and speculation in Genoa. It was understood, though not
officially stated, that the Vatican had been gratified by the
fate of the Tsarist system as that regime had meant the
negation of religious liberty. If Tsarism had established itself
on the shores of the Bosphorus, Catholicism would have suffered
a sort of " Oriental Sedan." The Vatican was not in any degree
hostile to the Russian Church, and desired with ever-increasing
earnestness a union of the Western and Eastern communions.

Meanwhile the Russians were studiously poring over the
Memorandum, to which they had to reply. Russia had been
almost wholly detached from Europe since the events of 1917,
so that it is not surprising they should desire some further
information on such subjects as the British Trade Facilities
Act, to which the Memorandum had referred. M. Krassine
called on Sir Laming Worthington-Evans with this object,
and Mr. Lloyd George dropped in during the conversation.
It was on such innocent incidents as these that disturbing
reports were built of separate agreements and secret treaties.
It is probable that the information elicited on this occasion
was not wholly satisfactory, as it offered the Bolshevists
only a poor prospect of obtaining the three hundred million
pounds in liquid cash, to which figure the Soviet demand had
now been scaled down. But we need not linger over these
inquiries and the rumours and speculations which filled this
week of waiting. Despite the attractions of Genoa and its
lovely environs, the personnel of the Conference was by this
time suffering from nostalgia in an acute form, and the Russian
reply, which appeared at last on May nth, was welcomed as
bringing into view some final and emancipating decision.

The reply, a six-thousand-word affair, is given in the Ap-
pendix,* but some digest is more appropriate to the course
of a historic narrative :

" It opens with a preliminary declaration that the
European Memorandum put forward no equitable solu-
tion of the Russian problem, but is, in some respects,
a retrograde step, when compared with the propositions

* Appendix VII.

14*

212 The Genoa Conference

delivered to the Bolshevists after the private conversa-
tions at the Villa de Albertis on April 20th, and even as
compared with the London report of the financial experts.
Moreover, the concerted European document deviates
notably from the line traced by the articles of the Cannes
Resolution. The Convening Powers explained their
invitation to contemporary Russia by ' the necessity of
restoring to the European system its paralysed vitality.'
The means of attaining this end was to have been the
economic reconstruction of Central and Eastern Europe.

" The Russian Delegation, in conformity with the
Cannes Resolution, brought to Genoa a number of pro-
jects for credits and loans that Russia needed in exchange
for legal and material guarantees. It brought also a
list of industrial, mining and other concessions which
it was anxious to grant to foreigners. Hitherto it has
not been allowed to submit these projects to the Com-
mission of Experts, which lays down as antecedent con-
dition the acceptance of an obligation by Russia to
recognize Government and private debts.

" This method is bad ; it turns its back upon the future.
Moreover, more than one State represented at Genoa has
repudiated in the past its debts and obligations, and has
confiscated without indemnity the property of foreigners
and of its own citizens.

' The obstinacy of some Powers in excluding Russia
from international, economic and political life is not
explicable alone by material considerations, but is also
inspired by considerations of a political order. The
complete triumph of capitalistic individualism is sought.
The Soviet Delegation has refused, and still refuses, to
introduce into current discussion any kind of political
tendency, but they must point out that the efforts to
secure at Genoa the triumph of a party, of a social system,
is contrary to the letter and to the spirit of the first
condition of the Cannes Resolution. If the labours of
the Conference are threatened, responsibility will fall on

The Reply 213

those Powers which, putting themselves in opposition to
the general desire for agreement, have placed the interest
of certain social groups above the common interests of
Europe.

" The European document supposes that the economic
isolation of Russia would injure Russia only. Con-
sequently, its idea is that Russia should make all the
sacrifices. The truth is that Russia cannot be replaced,
and that the only sound principle is one of give-and-take.

:' The European document, moreover, does not reply
to the question about the credits to be given to Russia
and enumerates only the credits to be given to the
nationals of other States who may wish to trade with
Russia. Such credits are valueless unless the Russian
Government is assured of the financial means necessary
to assist production, both industrial and agricultural,
to restore means of transport, and to reform the currency
by stopping the issue of paper roubles. These measures
can only be applied by a Russian Government plan such
as the Russian Delegation has not been allowed to present.

" On the other hand, the European document puts
forward in detail the question of inter-Government debts
and private claims. Besides, it picks out one of the
Cannes conditions, concerning subversive propaganda,
reads a new meaning into it and makes of it a unilateral
obligation for Russia. It is asked that Russia should
' suppress all attempts in its territory to assist revolu-
tionary movements in other States.' If this means that
the activity of political parties or labour organizations
is to be prohibited, Russia cannot accept ;Such a pro-
hibition unless the activity in question is contrary to the
law of the land. The European demand that Russia
should ' refrain from any action which might disturb the
territorial and political status quo in other States ' is a vain
attempt to secure Russian recognition of treaties con-
cluded by other States. This question Russia is ready
to discuss with the interested Powers at the opportune

214 The Genoa Conference

moment. The relations between Rumania and Russia can-
not be excluded from all questions at issue between them.
" Since it is desired also to assure peace in Asia Minor,
Turkey ought to have been invited to Genoa. The close
friendship between Russia and Turkey would have helped
to attain the end desired. As to Russian neutrality in
the Graeco-Turkish war, it can only be the same neutrality
as is required of all Powers by international laws and
conventions.

PRIVATE PROPERTY

' The Russian Revolution needs no justification before
an assembly of Powers, many of whom count more than
one revolution in their own history. Revolutions, which
are violent ruptures with the past, carry with them
a new juridical status in home and foreign relations.
Revolutionary Governments are not bound to respect
the obligations of Governments which have lapsed.
The French Convention proclaimed in 1792 that ' The
sovereignty of peoples is not bound by the treaties of
tyrants.' The United States repudiated the treaties of
their predecessors, England and Spain. The Govern-
ments of States victorious during the recent war seized
the debts of nationals of vanquished States in their own
territory and abroad. Russia therefore cannot be com-
pelled to assume any responsibility towards foreign
Powers and their nationals for the cancellation of public
debts and the nationalization of private property.

" None the less, Russia accepted the conditions of the
Cannes Resolution on condition that they be made recip-
rocal and imply an obligation for every Government
to compensate losses caused by its acts of negligence.
Great Britain has had to pay fifteen and a half million
dollars for damage done by the privateer Alabama.
Hence, the Powers which supported counter-revolutionary
movements in Russia or blockaded her are responsible
for the damage done. True, the Russian Delegation

The Reply 215

made concessions as a result of the Villa de Albertis
conversations, and declared its readiness to drop its
counter-claims in return for other concessions, of which
the chief was to be the placing of real credits at the dis-
posal of the Russian Government. The Powers have
not kept this engagement. Neither have they con-
sented to cancel war debts, the cancellation of which
was one of the Russian conditions. Their Memorandum
merely proposes that this question shall be settled by
an arbitral tribunal. Consequently the Villa de Albertis
negotiations have been rendered vain. Responsibility
for this does not fall upon Russia.

"As to Article 7 of the European document, it is in
flagrant contradiction with the first article of the Cannes
Resolution, and is inconsistent with the Russian social
system and the Russian sovereign rights. Russian
sovereignty becomes the sport of fortune. It is at the
mercy of a mixed arbitral tribunal composed of four
foreigners and one Russian. This would inevitably lead
to foreign intervention in Russian home affairs. Clause 7
has thus no practical character. Foreigners who entered
Russia in virtue of it would soon feel general hostility
towards them.

" The Russian Delegation notes, moreover, that the
interested Powers reserve all their solicitude for a small
group of foreign capitalists, and prevent very many
foreign capitalists from enjoying the facilities and
guarantees which the Russian Government would be ready
to grant them. The interest of the mass of small holders
of Russian bonds has also been sacrificed. It is sur-
prising that Powers like France, amongst whose citizens
the majority of these small holders are to be found,
should have subordinated their interests to those of
certain groups that demand the restitution of property.

" The invitation of the Russian Delegation to Genoa
implied that the language of foreign Powers towards
Russia would not have been that of victors towards

216 The Genoa Conference

vanquished, since Russia has not been conquered, but the
language of equality. Russia is still ready to make
important concessions, but only in return for correspond-
ing concessions. But in the mutual cancellation of
claims and counter-claims the Russian Government is
determined to respect the interests of the small bond-
holders. The task of considering the solution of these
difficulties must be entrusted to a mixed Committee of
Experts, appointed by the Conference, such Committee
to work at a date and place to be agreed upon. The great
obstacle hitherto encountered is that all the Powers have
not yet sufficiently recognized the idea of reciprocity,
although the preliminary conversations hitherto held
have pointed the way to a closer understanding between
Soviet Russia and foreign Powers.

" The Russian Delegation thinks that the financial
difficulties which have arisen ought not to prove an
obstacle to the possibility and necessity of solving other
problems at Genoa, and in the first place the problem
relating to the economic reconstruction of Europe and
Russia and the consolidation of peace. Russia came to
the Conference with conciliatory intentions, and still
hopes that her efforts will be crowned with success."*
The Conference put on its strongest spectacles and pro-
ceeded to study this remarkable dissertation. The earliest
impressions were very unfavourable. Mr. Lloyd George,
M. Barthou and Signer Schanzer held a preliminary sym-
posium, and were semi-officially reported to have agreed that
any further general discussion with the Bolshevists was
" impossible." Mr. Lloyd George accurately qualified the
reply as "a shrewish document." Signer Schanzer was
especially dismayed on realizing the character of the response,
which was evidently inspired or dictated by the Communist
workmen of Moscow. f

* The Times, May i2th.

t Mr. Lloyd George attributed the more uncompromising character of
the Russian reply to the influences of May ist in Russia. Se« the speech in
the House of Commons on page 308.

The Reply 217

But, judging from the communique of May nth to the
Anglo-American journalists in the University, Mr. Lloyd
George and the British Delegation glimpsed a ray of hope
through the " empty politics " of the earlier portion of the
reply and the depressing quality of the remainder. The
Russians evidently desired peace, and were ready to join in
a pact against aggression. That was regarded as satisfactory,
and the document was clearly one admitting of a reply.

Moreover, as the British Prime Minister quickly realized, the
Russian proposal for a mixed committee of experts sug-
gested an exit from the impasse, and a means of saving and
harvesting the results of the long effort at Genoa. He was at
once brought up before the full force of French prejudice
against co-operation with the representatives of Soviet Russia.
It was the last great battle on this ground. If the French
won, not only was the Genoa Conference discredited and
frustrated — a consummation which most Frenchmen and
some English people greatly desired — but the cause of
European peace and revival hopelessly set back. Mr. Lloyd
George needed all his attributes of mind and heart to win
over to his view M. Barthou and, through him, the more
rigid M. Poincare, who determined from Paris the action of
the French Delegation in Genoa.

On Saturday morning, May I3th, the issue was joined in
the Political Sub-Commission. Once more, as throughout
the Conference, England and Italy fought side by side for the
same liberal ideas. Without that help it is possible that
the British Prime Minister would this time have been over-
whelmed in the struggle with the forces of prejudice and
reaction.

The debate began by Mr. Lloyd George saying that if no
one desired to speak he would address the Commission. He
said that the Russian reply was most provoking and unsatis-
factory and very typical of Soviet diplomacy, which always
introduced such arguments. He thought in substance it
was quite clear that the Russians wished to come to some
arrangement if possible.

218 The Genoa Conference

Continuing, Mr. Lloyd George said that everyone had
difficulties with public opinion. If the Conference were to
break up on this matter it would be a serious thing for Europe
and Asia, sending the Russians back empty, which would
produce a feeling of resentment among the Russian popula-
tion, and create dangers for Russia's neighbours and dangers
to the peace of the world. He was quite sure that Russia
felt the need of credits, but he begged people to regard the
matter from a practical point of view and not to make a clash
between two antagonistic principles. If they could get down
to practical ground good progress could be made.

Mr. Lloyd George suggested that the appointment of mixed
commissions which would deal with these matters was essen-
tial, and the commissions should be mixed. Another com-
mission such as the London Commission would be a waste of
time.

He thought that one condition was essential to the success
of the plan. The commissions could not work in an atmo-
sphere of danger and menace and while many of the Powers
concerned were exposed to danger on their frontiers at any
hour. Therefore he proposed a truce on the de facto frontiers,
leaving the final settlement of the frontiers until the commis-
sions had completed their labours and the frontiers were
definitely established. There was no question of existing
frontiers, for the frontiers of Eastern Europe were not defined.
The truce must be reciprocal. There should be no propaganda
on either side against the institutions of either country.

Finally, Mr. Lloyd George proposed sending a sharp answer
to the propagandist part of the Russian document, which
needed an answer.

M. Barthou spoke next. He said that, acting on instruc-
tions from his Government, he was unable to reply to a docu-
ment which was itself an answer to a Memorandum which
France had not signed. M. Barthou went on to develop the
French view. He regarded the suggested commissions as
illusory. The Conference had been sitting for five weeks and
no progress had been made in this matter. The Russian

The Reply 219

document went behind the Conference, and was in opposition
to the Cannes Resolutions. The proposed commissions would
not achieve any result, considering that the best minds of
Europe had already failed in the negotiations with the Russians.
It would be the same with the proposed commissions, and
would only be restarting the Genoa Conference in another
form.

Signer Schanzer and M. Bratianu played the parts of media-
tors between the French and British views. The former,
however, insisted that Russia must be represented on the
Commission and begged M. Barthou to reconsider his words.
M. Bratianu said even an inferior solution to which all agreed
was better than a solution which divided the Powers into two
camps. Might not the Governments have the responsibility
of deciding whether the Russians should be represented on
the Commission ? He also suggested that there might be
one Commission composed of Bolshevists and one composed
of representatives of other Powers, which might meet together
when occasion arose. Meanwhile it would be advisable to
adjourn the sitting to give an opportunity for informal
discussions.

There was general agreement with the Rumanian delegate's
suggestion for an adjournment, and the Sub-Commission
dispersed until the afternoon.

Mr. Lloyd George and M. Barthou were always good friends
when in mufti, and the lunch they now took together may
have contributed to the happier tone of the afternoon's
discussions.

When the delegates met again it was announced that a two
hours' conversation at the Hotel Miramare between Mr. Lloyd
George and M. Barthou had led to an understanding on almost
all points. The remaining points would probably be settled
at a meeting on Sunday morning at the Villa de Albertis
between Mr. Lloyd George, M. Barthou, M. Jaspar, Signer
Schanzer, and the Japanese Delegate. This was good news
to the members of the Sub-Commission, who felt that they
might no\v begin to pack their bags for the home journey.

220 The Genoa Conference

Viscount Ishii supported the British proposal, while, accord-
ing to British accounts, M. Motta, for Switzerland, was en-
thusiastic for the idea of a truce. M. Barthou and Mr. Lloyd
George congratulated each other on the friendliness of their
conversation, and M. Skirmunt, Signor Schanzer and M.
Jaspar all found words of praise for the work of the Conference.

The British Prime Minister pointed out the necessity of
deciding as soon as possible the place and date of the meeting
of the Russian Commission, and M. Barthou sounded a warning
note against the danger of States concluding separate agree-
ments with Russia before the Commission had time to finish
its work.

Signor Schanzer pointed out that Italy agreed that separate
agreements should not be signed, but this only applied to
political agreements. Italy desired to have complete freedom
of action for economic agreements and, indeed, already had a
commercial treaty with Russia which now needed nothing
but signature. He also considered that there should be a
time limit to the work of the Commission, after which the
Powers should be automatically permitted to make political
agreements if they desired so to do.

On Sunday the delegates of the Convening Powers met at
the Villa de Albertis to discuss the appointment of the Com-
missions and the non-aggression truce. The conversations
were resumed in the afternoon, much progress being made.
The difficulty about the mixed Commission had been got
over, in accordance with M. Bratianu's proposal, by the substi-
tution of two Commissions, one appointed by the Powers
represented at Genoa (without Russia and Germany) and
another by the Russians themselves. These Commissions
were to have an equal status, but the French objection to sit
with Russians on a mixed Commission was satisfied by this dual
device. It was also agreed on this strenuous Sabbath (May
I4th) that the Commissions should report within three months
of the opening sitting, and that the Powers concerned should
undertake to conclude no separate political agreements with
the Bolshevists during that period. The United States were

The Reply 221

to be asked to send representatives to The Hague, and the
non-aggression pact was further considered.

On Sunday evening M. Tchitcherin addressed a letter to
Signer Schanzer, Chairman of the Political Sub-Commission,
protesting against the plans to exclude the Russians from
the opening discussions at The Hague Conference and to lay
an embargo on separate agreements during its sittings. This
latter arrangement the Russian Delegate described as " a new
blockade " directed against the Russian people. He declared
that every time an agreement was nearly reached certain
Powers placed their individual interests above those of Europe
and reduced the common efforts to their former level. There
was much more which it is not necessary to repeat, for M.
Tchitcherin and Signor Schanzer met the next morning, when
the Italian Delegate explained that there was no intention
of excluding the Russians from any debates, the preliminary
meeting being merely for the purpose of electing the " panel "
and making other arrangements.

The Political Sub-Commission met immediately after. The
proposals made at Sunday's meetings were adopted, and it
was decided to call the Russians to a meeting of the Sub-
Commission to be held the next morning. M. Barthou
intimated that France could not take part in that meeting
as she had not signed the Memorandum to the Bolshevists,
but if the Russians accepted the reply he would recommend
it to his Government, pointing out that the French were in
agreement with the other delegations.

The text of the Note handed to the Russian Delegation by
the chiefs of the Italian, British, French, Belgian and Japanese
Delegations was as follows :

1. The proposal made by the Russian delegates in their
Memorandum of May nth, 1922, for a meeting of a Com-
mission of Experts should be accepted in the form provided
in the Annex, and June 26th should be proposed as the
date of the meeting.

2. The Powers represented at Genoa other than Germany
and Russia shall be invited by the President of the Genoa

222 The Genoa Conference

Conference to send representatives to The Hague on June
I5th, 1922, for a preliminary exchange of views to con-
sider the line of action to be adopted by the Commission
of Experts towards Russia. The President of the Genoa
Conference shall be requested to extend a similar invita-
tion to the U.S.A. if he ascertains that she is willing to
attend.

3. The representatives at The Hague will decide how
the Commission, which is to be charged with the conduct
of negotiation with the Russian Commission, is to be
composed.

4. The Governments represented at the preliminary
exchange of views will, in the light of these discussions,
intimate, unless they have already done so, whether or
not they are willing to take part in the Commission. Un-
willingness to do so on the part of a Government will
not prevent the meeting of the Commission on behalf
of the other Governments.

5. If no joint recommendation can be submitted by
the Commission of Experts within a period of three
months from the date mentioned in Clause 4 of the an-
nexed document, or if the joint recommendations are not
accepted by the Governments concerned within one
month after the date of the recommendations, each
Government will be at liberty to make a separate agree-
ment with the Russian Soviet Government on the matters
referred to in Clause 3 of the annexed document.

6. The Delegations are agreed to recommend to their
respective Governments not to recognize or support any
private agreements made by their nationals with the
Russian Soviet Government affecting property previously
belonging to other foreigners before the conclusion of the
work of the Expert Commissions or during the month
following the making of joint recommendations, if
any.

7. The annexed document should be communicated to
the Russian Delegation.

The Reply 228

8. The Belgian and French Delegations declared they
would recommend their Governments to adhere to the
decision embodied in the present proc&s verbal.

ANNEX

DRAFT CLAUSES FOR COMMUNICATION TO THE RUSSIAN

GOVERNMENT

1. The Powers mentioned above agree that a Commis-
sion of Experts shall be appointed for the purpose of the
further consideration of outstanding differences between
the Russian Soviet Government and the other Govern-
ments and for the purpose of meeting a Russian Commis-
sion similarly empowered.

2. The names of the Powers represented on the Non-
Russian Commission will be communicated to the Russian
Soviet Government, and the names of the members of
the Russian Commission will be communicated to the
other Governments not later than June 20th.

3. The matters to be dealt with by these Commissions
will comprise all outstanding questions relating to debts,
private property, and credits.

4. Members of the two Commissions will meet at The
Hague on June 26th, 1922.

5. The Commissions will endeavour to arrive at joint
recommendations on matters dealt with in Clause 3.

6. In order to enable the work of the Commissions to
be carried on in tranquillity and in order to restore mutual
confidence, engagements will be entered into binding
the Russian Soviet Government on the one hand and the
other participating Governments on the other hand to
refrain from subversive propaganda.

The pact to refrain from acts of aggression will be
founded on the observance of the existing status quo, and
will remain in force either until the outstanding frontier
questions of Europe are settled or for a definite period.*

* The final draft said " will remain in force for a period of four months
from the closing of the work of the Commissions."

224 The Genoa Conference

The agreement against propaganda will bind all the
signatory Governments to abstain from interfering in any
way in the internal affairs of other States, from supporting
by financial or other means the work of political organi-
zations in other countries, and also to suppress in their
territory attempts to foment acts of violence against
other States and attempts which might disturb the terri-
torial and political status quo.

On the morning of Monday, May I5th, Mr. Lloyd George
came down to the University to confer with the British and
American journalists at their one o'clock meeting. It was
the Prime Minister, but somewhat mutatus ab illo, the gay
and debonair statesman of the last interview. A certain
weariness of voice and manner testified to the strain and
struggle of the last few days. He said that he had handed the
draft clauses for communication to the Russian Delegation
to the American Ambassador, Mr. Child, the evening before,
on behalf of the inviting Powers. This would be followed
by a formal invitation if the Russians accepted the clauses.
The Prime Minister insisted that the preliminary meeting of
the Powers at The Hague was only to decide the line of
action, not to develop a complete proposal. The Hague
Commission was, in substance, an acceptance of the Russian
proposal. In his opinion there was no difference between
two Commissions meeting at the same table and a mixed
Commission, and he considered that The Hague plan gave the
Russians absolute equality. The main object of the clause
prohibiting separate agreements was to save the Commission
from the recurrence of incidents like the German-Russian
Treaty. Sweden, Czecho-Slovakia, Italy and Japan were
already negotiating trade agreements and these negotiations
would continue. It was naturally impossible to prevent
negotiations from proceeding between the Soviets and private
individuals while the Commission sat.

The non-aggression truce, said the Prime Minister, only
applied to the Russian frontiers, because the other unsettled
frontiers were under the jurisdiction of the League of Nations.

The Reply 225

Once agreements with Russia had been reached, he hoped
that the truce would be converted into a permanent pact of
peace, " but if the Russians refuse to meet us at The Hague
we have nothing further to say to them."

Mr. Lloyd George refused to give a forecast of the date
of his return to England, but said that if an agreement was
reached with the Bolshevists there would be a general desire
to wind up the Conference as soon as possible. Therefore he
was unable to say whether the questions dealing with Hun-
garian minorities, Bulgaria, and Eastern Galicia would be
discussed at Genoa. In any case, he said, these questions
affected the League 01 Nations rather than the Political
Sub-Commission.

But though Mr. Lloyd George was now fighting de guerre
lasse, and the strain was beginning to tell, his courage and
determination were unbroken. He had once more avoided
the temptation to exploit this latest French error of opposing
the Hague continuation, to force her into isolation and
hold her up to the world as the real European " Friedenstorer."
He had patiently set to work to argue and persuade her out
of her new fit of intransigeance, and he had once more suc-
ceeded. He knew that he must needs take France, as well
as Germany and Russia, along with him on the road to peace
and recovery if that goal was ever to be reached.

Mr. Lloyd George comes of an impulsive race, and is sup-
posed to share that attribute. The more remarkable, there-
fore, are those qualities of patience and self-command, that
determination never to be deflected from the line of duty and
policy by any personal irritations, which he has manifested
so often in the post-war conferences.

His next task was to lubricate the stiff neck and other
joints of the Bolshevik delegates. This he essayed and
achieved in a memorable meeting of the Political Sub-Com-
mission on Wednesday, May lyth. The correspondent of the
Manchester Guardian, describing this event, remarked that
" Mr. George is one of the few international statesmen who
have the gift of being able to touch lightly on international

15

226 The Genoa Conference

difficulties and disputes, to joke about propaganda, and be
witty about Communism, and extract smiles from perfervid
partisans in front of him at their own expense."

One always felt at these gatherings of international states-
men that everybody was too deadly serious, and that such
an atmosphere, inadequately oxygenated with humour and
gaiety, tended rather to generate than to dispel discord and
ill-temper. Ridentem dicere verum, Quid vetat ? Mr. Lloyd
George saved situations again and again by easing the tone
and tension of a meeting just by setting the disputants
a-laughing in the common enjoyment of a good joke or two.
Such was the alchemy by which he conjured all the sourness
and obstinacy out of the minds of the Bolshevik delegates.
No reporters were admitted to such meetings, but we are told
how the British Prime Minister " chaffed the Bolshevists into
merriment," how the speech which did the deed sparkled with
humour and convinced by its lucid and reasonable qualities.*

And so the Russians were induced with some slight modifi-
cations to accept the Hague proposals and the non-aggression
pact. According to Renter's agency, M. Tchitcherin read at
the meeting a statement in which he said that the appoint-
ment of two commissions would perpetuate the Genoa method
and lead to separate meetings, but he would accept the pro-
posal to take part in the Commission. He repeated his
protest against the exclusion of Germany, as the question of
credits, which was not covered by the Treaty of Rapallo,
would be discussed at The Hague.

M. Tchitcherin declared that the Russians would prefer
Stockholm or Riga as a meeting-place, but were ready to go
to Rome or London. He welcomed the truce. He thought
the frontier truce should include the Allied Soviet Republics,
and he declared he would take it in this sense. He wanted
the truce to be broadened so as to include all aggression by
bands, and, referring to General Wrangel's bands, asked that
they should be removed to more distant countries.

Mr. Lloyd George laughingly remarked : " Not here ! "

* Sec a brilliant article in the Observer of May 2ist.

The Reply 227

In further discussion Mr. Lloyd George objected to London
as the proposed meeting-place, as Great Britain " had a definite
and live policy."

Signor Schanzer followed M. Tchitcherin. He said that
they could not take cognizance of the documents handed in
by the Russian Delegate, as the matters dealt with therein
were outside the purview of the Conference.

Mr. Lloyd George said that Germany could not be excluded
from co-operation in the reconstruction of Russia, and it
would be folly to attempt to exclude her. Dealing with the
meeting-place of the prospective Commission, Mr. Lloyd
George said that both Rome and London were unsuitable,
that The Hague was a place internationalized by tradition,
and possessed the necessary international atmosphere. The
Premier next dealt with another of M. Tchitcherin's observa-
tions— namely, that the Genoa Conference had failed because
they had dealt with things by separate discussion.

Mr. Lloyd George said there was no doubt that the two
systems of government were quite irreconcilable — namely,
the system in Russia and that in other parts of the world, but
they were coming nearer to each other. Peasant proprietor-
ship in Russia would finally result in the same system as fol-
lowed the French Revolution. The Russians, with their eight
independent republics, would meet separately, and the other
Powers would meet with their twenty-five nations, which he
hoped were more independent. Until they grasped the
reality that they could not reconcile the principles but might
in practice be able to arrive at some accommodation between
these two systems they would never succeed.

Thus did the British Prime Minister save, or salvage, the
harvest of the labours at Genoa by an adjournment to The
Hague. Thus did he save Europe from the incalculable peril
and disaster which might have resulted from a fiasco in the
Italian city. Many of the hopes of Genoa were postponed, but
the world enjoyed, without any sense of disillusionment, the
advantage of those six weeks' counsels and conversations which
had poured such a flood of light on the European problem.

15*

CHAPTER XIV

THE ECONOMIC COMMISSION REPORTS

THE third or Economic Commission had been working
all this time steadily but rather slowly. There was
such a general interest in the subjects under discussion that
more representatives wished to have their say than in the
other Commissions. The debates turned mainly round the
" most-favoured-nation " principle. Trade, especially among
the new states in the East of Europe, was greatly impeded
by fiscal barriers of a selfish character. The fluctuation and
uncertainty were as embarrassing as the amount of these
tariffs. " Human ingenuity," said Mr. Lloyd George, " was
exhausted in order to make trade between nations as difficult
as possible." There was a strong feeling among the bigger
Powers that these obstacles must be removed if the machinery
of exchange was once more to run freely. Germany com-
plained of definite and persistent discrimination against her
goods, the effect of which was still further to depreciate the
German currency. The great Powers were anxious that the
" most-favoured-nation " principle should be universally
applied.

This meant the nearest approach to general Free Trade as
yet possible in our imperfect world. The reader who desires
information on a fiscal policy which was woven inextricably
into the commercial world-system before the war, should
study the following statement made by Sir Philip Lloyd-
Greame, the very able secretary for the Overseas Trade
Department, one of the two leading British delegates on the
Economic Commission. It was made in the First Economic

228

The Economic Commission Reports 229

Sub-Commission on May ist. A careful definition of " most-
favoured-nation " treatment will be found in the opening
sentences :

"Sir Philip Lloyd-Greame said that he was not sur-
prised to find that there were several proposals before the
Sub-Commission upon this question of most-favoured-
nation treatment, which was one of the most, if not the
most, important matter which the Sub-Commission
had to deal with. He would not discuss the differences,
which indeed were not large, between the different
proposals. The principle and the practice underlying
them were the same, and, as the Sub-Commission would
no doubt expect, commanded his very warm support.
If he were called upon to formulate this principle in
regard to Europe in terms, he would express it to be that
the produce or manufactures of any European country
should have the advantage in every other European
country of the lowest rate of Customs duty imposed in
that country on similar goods which were the produce or
manufacture of any other foreign country whatsoever.
This principle was one of cardinal importance in the
deliberations of the Conference.

'' That the application of the principle should be at-
tained, and that for this purpose it should be made the
aim of the efforts of all the countries, appeared to him to
be the natural and inevitable consequence of the reso-
lutions agreed upon by the London Experts, and those
hitherto adopted by the Sub-Commissions of the Economic
Commission and approved a few days ago by the full
Commission. In the London Experts' Report, while
there was not a definite resolution on the subject of most-
favoured-nation treatment, there was a note of great
importance which said that in addition to the other
provisions on the subject of Customs matters, a suggestion
was considered by the Experts that resolutions should be
submitted to the Genoa Conference for acceptance,
providing during a certain period for the mutual accord

230 The Genoa Conference

to each other by all the nations represented of the treatment
of the most-favoured-nation in Customs matters, subject
to certain reservations it would be necessary to make
to meet special difficulties. The note went on to say,
and he would draw special attention to these words,
that " it was generally recognized that on purely economic
grounds some such provision could be welcomed in the
present general situation," but some of the Experts
did not feel able to accept the proposals as presented.

' ' The Genoa Conference had met to try and arrive at a
common basis of co-operation, because the machine
of trade in Europe had broken down. Everywhere, in
the Economic Commission, in the Financial Commission,
it was found that this great machine, extraordinarily
complex, but before the war extraordinarily smooth in
its working, had broken down ; and it could not get
to work again unless the cardinal fact was recognized
that trade was a mutual thing — that you could not sell
unless you would buy. The difficulties which had to
be faced in both Commissions were two — uncertainty
and inequality. The merchant would only be able to
get back into the business of the world if he could know
with certainty what were the prospects which awaited
him there, and what were the conditions under which
he would have to work. The Sub-Commission had already
agreed that it was disastrous to trade to have constant
changes in its conditions and the constant imposition of
fresh obstacles, — uncertainty whether this special treat-
ment would not be established for one country and that
special treatment for another. What the trader needed
was certainty, and what was needed so that he might
find the financial support he required was also the security
of trade, the best guarantee of which was equality of
treatment.

" He wished to submit to the Commission that Europe
stood to-day at the parting of the ways, and this Con-
ference would have been false to itself and would stultify

The Economic Commission Reports 231

the work of the Economic Commission if it did not accept
the most-favoured-nation principle as the goal at which
it was aiming. The delegates here present would shortly
be returning to their countries to mould the commercial
policy of the various States in the future. Either they
would go back prepared to negotiate an endless chain of
special treaties differentiating country by country, which
he submitted was the way in which to keep Europe in
the position in which it was to-day ; or they would go
back prepared to carry out as rapidly as possible and as
completely as possible the principle of the mutuality of
trade, taking for their goal the general most-favoured-
nation treatment of the trade of all the countries here
represented."

This rule against fiscal discrimination against or in favour
of particular States was approved by the Commission with
few reservations (see Article 9). If it be duly applied by the
governments of the States represented at the Conference,
the revival of trade will be greatly assisted.

Another important Article had reference to raw materials
and export duties. Here again a policy of discrimination was
condemned. Many States raise revenue by duties on their
exports. For example, Chile makes a large income by this
means on her large exportations of nitrates. It was suggested
by Signor Rossi, chief Italian delegate on the Commission,
that a maximum of ten per cent, should be fixed for such
levies. Others suggested twenty-five per cent. The Sub-
Commission ultimately decided that " no export duty should
be maintained or established upon raw materials, the output
of which exceeds home needs, except duties of a purely fiscal
character, which, on account of this very character, should
not exceed a low percentage of the value of the product,
although they may vary according to the country and the
nature of the product." And the Article goes on to prescribe
that " export duties should not vary according to the foreign
country of destination."

This freedom or equality of access to raw materials for all

232 The Genoa Conference

nations has been the rule in British tropical administration
for many years. A most unfortunate inroad was recently
made into this honourable tradition in the case of African
oil-palm products. This exception was one of the evil results
of the war and we may hope will soon disappear.

The Report contains other important recommendations,
prompted by a liberal spirit, with regard to the treatment
of foreigners in the conduct of business, the protection of
industrial, literary and artistic property, agriculture, labour
and other subjects.

The Report will be found in the Appendix. The interesting
speeches of the Italian, German and Russian delegates will
be found in the next chapter. These Reports of the Financial,
Economic and Transport Commissions are among the more
ponderable products of the Genoa Conference. This great
body of recommendations, covering so large an area of human
interest and representing the highest and most experienced
wisdom of the world on these subjects, amply suffice in them-
selves to redeem the Conference from the imputation of
sterility.

CHAPTER XV

THE FINAL "PLENARY"

THE Conference was finally wound up on May igth
at a third plenary session in the now familiar hall of
the Palazzo di San Giorgio. It was a beautiful early summer
morning and the delegates were as gay and excited as school-
boys on a breaking-up day. The first business was the
adoption of the Report of the Third or Economic Commission,
which occasioned a sharp passage of arms between M. Tchit-
cherin and M. Colrat, the latter running very near to giving
the " lie direct " to the Soviet leader. A very interesting
speech was that of Herr Rathenau, who is a master of clear
thinking and lucid exposition. The accomplished Teuton
spoke on this occasion in French and ended with a happy
quotation from Petrarch which made a deep impression.
There was no difficulty in adopting the Economic Report
with certain reservations which duly appear in the published
copies.

Then followed for adoption the Resolutions of the First
or Political Commission, the battle-ground of the most strenu-
ous fighting in the Conference. Signer Schanzer gave a
summarized account of the course of the Russian controversy
in the Commission, and then read the document which passed
on the " torch of Genoa to The Hague " and laid down the
terms of the Pact of Peace. Another breeze, not welcome
jven on that hot morning, arose over the question of Vilna.
M. Galvanauskas, Prime Minister of Lithuania, managed to
become embroiled with his own translator over this question.
M. Skirmunt, chief Polish Delegate having made an inaudible
effort to reply, the question was ruled out of order.

233

234 The Genoa Conference

Then followed the dramatic spectacle of the delegates of
the nations rising successively in their places and accepting,
a few with reservations, the Pact of Peace. Even little Ice-
land— cool word on a hot day — generously undertook to
refrain for eight months from any act of aggression on its
neighbours. Very impressive, too, were the responses of
Canada, Australia, New Zealand, South Africa and India
— the far-flung Dominions of the British Oceanic Empire,
representing some 350 million human souls.

Germany was left out, as she had been excluded from the
discussions of the Sub-Commission. The Pact was not so
elaborate and permanent an instrument as had been intended
and, indeed, partly forged in the early days of the Conference,
with the able assistance of Dr. Benes, Czecho-Slovakian
Prime Minister. It was limited in time and closely dependent
on the proceedings at The Hague, but, as M. Schanzer said,
the strongest hope was cherished that at its termination
" a more general and more permanent pact would be sub-
stituted for it," and that " the ideal of uniting all nations in
a single great organization for peace would become a reality
within the shortest possible time."

Once more the great event which the nations eagerly
awaited was the speech of the British Prime Minister. -Mr.
Lloyd George had arrived rather late, and spent his time pre-
paring his notes and keeping one eye on the remarkable
events proceeding around him. He had apparently recovered
his health and spirits and spoke, after a quick opening prelude,
with his usual energy. It was remarked that one of his
homely illustrations — that of the life-line — was drawn from
a revivalist hymnbook which must have been familiar to him
in his youth — perhaps the first introduction of Messrs. Moody
and Sankey to the Genoese Palace of St. George.

It was one of the Prime Minister's happiest and most
brilliant speeches — full of colour and light and of those homely
and picturesque parables in which Mr. Lloyd George so greatly
excels— with that continuous obUigato of gesture and attitude
which is almost as expressive as the words themselves. He

The Final " Plenary " 235

warned Russia that every day Europe's need of her grew
less and her need of Europe greater. With irrefragable
common-sense he pointed out that it was not a good policy
to accompany a demand for credits with a dogmatic exposition
of the rights of debtors to disown their debts. He did not
know what the effect of the Russian Note of May nth had
been in Russia. In the rest of Europe it had been disastrous.
A different way must be followed at The Hague or the pursuit
of Peace would be vain. They had had all sorts of weather
at Genoa, but these had all " ended in blue skies." " That is
the history of the Conference." " You need all kinds of
weather to make a good harvest, and if you look at what
has been accomplished at Genoa, you will find that we have
reaped and garnered fine crops." The Prime Minister closed
on the note of Peace and the Pact of Peace. " The thrill
of peace," he said, " has gone through the veins of Europe
and you are not going to get nation lifting up hand against
nation again."

The speech and its subsequent translation were heartily
applauded by the delegates, who must by this time have had
a full understanding of British Liberalism in politics as ex-
pounded by its greatest and most eloquent champion. Some-
thing of this sort may have been in the mind of Signer Facta
when at the Press luncheon on the same day he stated that
the British Prime Minister and the British Delegation by
their influence in Genoa had made " a real contribution to
civilization and progress."

But the school was not yet to be dismissed. M. Barthou
rose to protest — almost too much — in the interest of peace
and to amuse the Conference with an allusion to his having
been burnt in effigy at Petrograd. Then came M. Stam-
bulisky, " the fierce-moustached, black- visaged peasant Prime
Minister of Bulgaria,"* whose speech was translated into
French and English by a charming lady, Miss Stanciof. M.
Tchitcherin followed with a shrewd thrust at Mr. Lloyd George.
" While, no doubt, people who wanted to borrow should first

* The Manchester Guardian.

28C The Genoa Conference

promise to pay debts, another side of the matter was that a
man who had had his house broken into and pillaged had a
legitimate claim against the perpetrators of those acts."

Signer Facta concluded the proceedings with a graceful
speech of farewell, and the Genoa Conference passed into
history at i p.m., May igth, or, to speak more precisely,
adjourned to The Hague.

The Report of the last " Plenary " was as follows :

THIRD PLENARY SESSION

The meeting opened at 9.15 a.m., M. Facta (Italy) in the
Chair.

The President (speaking in Italian) :

" In accordance with Article 12 of the Rules of Procedure,
as no objection has been made to the Minutes of the Second
Plenary Meeting, which have been distributed, they are
considered as adopted.

" I propose that the resolutions on the questions of finance
and of transport, which were approved at the Second Plenary
Meeting of the Conference, shall be reprinted and annexed to
the Minutes of the present Plenary Meeting. They will thus
form Annexes i and 2 to these Minutes.

" If there is no objection, these motions will be considered
as adopted."

The motions were adopted.

THE ECONOMIC REPORT

The President (speaking in Italian) :

" I call upon M. Colrat, President of the Economic Com-
mission, to speak."

M. Colrat (France) (speaking in French) :
' The economic problems of the present day are of so wide
and complicated a nature that the Commission of which I
have had the honour to be President might well have found
in its very title an excuse for ambitious resolutions. I wish
my first words to be a tribute to the wisdom of the statesmen
who have composed it. They have not judged it necessary,

The Final " Plenary " 287

or even useful, to offer to a still bruised and suffering Europe
the cold comfort of those high-flown resolutions which fall
from the lips of theorists with an air of oracular solemnity.
They merely offer, in a frank and unpretentious spirit, advice
based on long experience. These counsels are not being
enunciated for the first time. Recent events, however, have
shown that it is unwise to neglect or despise such counsels.
The fact that they have stood the test of long and painful
experience is a proof of their truth and vitality. The Third
Commission of the Genoa Conference does not claim to have
invented them. It has only retrieved them from the mass
of misconceptions, which are as ancient as the counsels of
common sense, but far more dangerous.

" First and foremost, the Commission has observed that
certain problems of world economy, grave though they may
be, call neither for joint discussion nor for common action.
At a time when disorganization and its disastrous conse-
quences are world-wide, nothing, perhaps, is more serious
than the disorganization of production. Almost everywhere
the war has created industries which cannot continue to thrive
by reason of the nature and habits of the countries in which
they have been set up. Industries which were normal before
the war have been developed to an abnormal and altogether
excessive extent.

"There has thus arisen an economic nationalism which aims
at producing everything, irrespective of the needs of con-
sumption, and without consideration of the costs of pro-
duction. The economic harmony of the world depended
upon a just division of labour between peoples. It has been
destroyed by a blind and presumptuous megalomania which
the nations must recognize and eradicate. That, however,
is a question of national economy. Each nation must resolve
it on its own account by the adjustment of its industry to its
natural wealth and its acquired capabilities. The Com-
mission has very rightly considered that it could not lay down
binding rules for this adjustment, since they would necessarily
be of a varying character. It would be vain to deny, and it

288 The Genoa Conference

is not without advantage to proclaim, that this adjustment is
desirable, and even urgently desirable, and that it is of the
greatest importance for the general stability of international
trade.

" The Commission has also judged it desirable to draw
attention to the predominant part played by agricultural
production in the reconstruction of Europe. The artificial
industries of which I have spoken, by drawing" the peasant
classes away from the land, cause over-production on the
one hand, and under-production on the other, thus resulting
in a double evil. The whole world needs agricultural pros-
perity. It needs it, above all else, because under-produc-
tion in agriculture results in famine. It is the unanimous
opinion of the Economic Commission that one of the most
effective means of restoring a state of healthy equilibrium to
Europe is the equipment, instruction and betterment of the
peasant classes. Its recommendation on this point is of the
highest utility.

" No less importance must be attached to the resolutions
regarding raw materials. Since 1916 the question of raw
materials has become an extremely urgent one. During the
war the growing scarcity of these materials, the lack of foreign
exchange and the shortage of tonnage caused many countries
to buy, transport and distribute in common fuel, oil, fer-
tilizers, textile raw materials and most kinds of minerals.
Immediately after the war, when markets were suddenly
freed from restrictions, the eagerness of buyers to satisfy
their requirements, often real and sometimes imaginary,
resulted in a considerable increase in prices. This had a
double consequence ; first, that manufacturers and middle-
men no longer maintained normal stocks and, secondly, that
consumers held back and restricted their purchases. After
this wild boom came the slump. To-day, prices for most
raw materials, quoted in dollars, have returned to their 1913
level. The manufacturer and the middleman, however, are
still at sea, whilst the buyer still holds aloof. The period of
speculation following on the conclusion of peace has resulted

The Final " Plenary " 239

in industrial, commercial and social turmoil. In order to
counteract it countries have prohibited, restricted and heavily
taxed the trade in raw materials. Countries are, of course,
free to take these measures. They may dispose of their
resources as they will, and devote them wholly to the national
requirements, if they think it essential or if they fear a
shortage. There is, however, a great temptation to abuse
this right by converting measures of precaution into measures
of aggression, extending to the superfluous what is only
required for the necessary, and systematically selling to foreign
manufacturers only under conditions which paralyse com-
petition. The Commission has endeavoured to find, and
believes it has found, effective guarantees against such a
system. I am happy to observe that, though they were first
proposed by France at the opening of the Peace Conference,
it was the perseverance of M. Rossi which secured their
acceptance at the Genoa Conference.

" The Economic Commission has endeavoured to deal with
the problem of international trade in the most systematic
and practical fashion.

" The resumption of commercial intercourse between
nations and the restoration of the channels of trade, which
the war had obliterated or diverted, were undoubtedly an
essential condition for the economic restoration of Europe.

" At the present time, taking as a basis of comparison the
tonnage of goods exchanged in world trade rather than their
values, which have undergone disproportionate changes, we
find that world trade has fallen by one-half compared with
1913. We can hardly, therefore, be surprised by the falling
off in production, by unemployment, by the stagnation of the
raw materials market and by the glut in freights.

" It is true that the alarming fall in the purchasing power
of the peoples impoverished by the war, or compelled to repair
the damage caused by it, is the root cause of this phenomenon ;
but it must be admitted that the decrease in the volume of
trade is also due to the artificial and restrictive regime which
has been established in Europe since the war.

240 The Genoa Conference

" This regime is partly due to the fact that territorial
changes have broken up certain economic systems, which had
been organized as a unit, without regard to racial autonomy
and the divergence of political aspirations. Your Com-
mission has felt bound to recommend the restoration, by
means of Conventions and Agreements, of the old channels
of trade, with the changes necessary to meet new European
conditions.

" But the abandonment of the freedom of trade of bygone
days has done more to multiply frontiers and to raise barriers
than the changes made in the political map.

" I have already said that the concentration of economic
forces during the war resulted almost everywhere in placing
in the hands of the State a considerable part of production
and almost the whole of foreign trade. Control of foreign
exchange, and consequently control of purchases in foreign
countries, control and rationing of raw materials, control and
co-ordination of national production, control and restriction
of the consumption of foodstuffs and of all articles of which
there was a shortage, control and direction of exports, control
and requisition of shipping — all these combined to produce a
sort of international State Socialism, the harmful effects of
which continued for many long months.

" After the conclusion of peace many countries still hoped
to find salvation in an artificial economic system.

" It is true that the disturbances caused by the war urged
them in this direction. The strongest had been weakened ;
the most active were without machinery or raw materials ;
the very inequality of conditions of production resulted in
the adoption of unprecedented methods of trade, the con-
sequences of which were aggravated by the instability of the
exchanges.

" One cannot feel surprised that countries desired to protect
themselves against the menace of stronger competitors. But,
during the last few months, protective Customs tariffs have
assumed forms which are particularly drastic and insidious,
and which, though of little real use to the countries which

The Final " Plenary ' 241

they are intended to protect, expose other countries to unfair
handicaps.

" It is time to return to a sounder economic system, more
in accordance with the equitable treatment of commerce,
which the Covenant of the League of Nations guarantees to
all peoples.

" The peace of the world depends upon the restoration of
the commercial treaties which united peoples, and of the
methods which were followed in the conclusion of those
treaties.

" In dealing with tariffs your Commission endeavoured
to respect the freedom of the various countries, which must
be able to direct their national economy and to provide their
own fiscal resources as they please. It aimed merely at
preparing the way for placing tariffs on a more stable basis.
It has, however, arrived at a decision regarding certain prob-
lems, the solution of which is of importance for the recon-
struction of Europe. I have referred to the guarantees
contemplated for trade in raw materials. I must add the
recommendation relating to the supplementary taxes on
goods carried under a foreign flag ; in other words, trade dis-
crimination based on the nationality of the carrier. The articles
concerning import and export prohibitions embody a doctrine
tending to restore more equitable and more liberal conditions,
without ignoring the sovereign rights and special conditions
of the various countries.

" With regard to agreements, the Commission did not con-
fine itself to recommending the conclusion of commercial
treaties. Convinced of the impossibility of removing by
means of uniform regulations the inequality resulting from
the varying conditions of production and differences in rates
of exchange, it has defined the measures by which countries
which are parties to agreements should comply with the
requirements of the equitable treatment of commerce guaran-
teed by the Covenant. The Commission did not wish at the
present moment to impose an exclusive choice between the
three theories on this subject which divide the world. The

16

242 The Genoa Conference

resolution which it has adopted permits of judicious adjust-
ment to circumstances. The majority of the Commission
showed a preference for the most-favoured-nation system ;
but it expressed this preference only in a note, thus indicating
that it did not feel, under existing conditions, that its views
could be set up as a universal rule.

" Gentlemen, with this word of caution I conclude.
' You have now to discuss the recommendations which we
submit to you: I can only ask you to adopt them as your
own. I know better than anyone the labours of which they
are the result.

" The Delegates of the nations represented at Genoa were
all conscious of the solemnity of the moment and of the
importance of the discussions. Each one of them was the
spokesman of a nation, and each one expressed the thought
and the will of his people with the force of eloquence and the
authority conferred by past services. Nevertheless, all aimed
at incorporating that thought and that will, without impairing
them, in a common thought and a common will, because each,
in defending the interests of his own country, was desirous of
contributing wholeheartedly to the restoration of Europe.
For Europe is to them not merely a geographical expression,
not merely a vague and mystic ' super-fatherland.' In their
eyes, Europe towers above the ruins of the present, in spite of
everything, and represents the great traditions of the past
and the hopes of the future.

" Gentlemen, if this tradition is to be preserved, if this
hope is to be realized, the workers in every factory in Europe
must carry out their task filled with pride in their rights and
rejoicing in the restoration of peace ; manufacturers must
evince a spirit of moderation and justice ; men of business
must consider their word as their bond ; and peoples as well
as individuals must respect that great pact of moral reciprocity,
of which Chesterton has so well said that it is the bridge over
the abyss.

" May I be allowed to say, on this sacred soil, where inter-
national law has its origin, that Europe is based upon respect

The Final " Plenary " 248

for treaties ? To fail in such respect would be to work against
Europe and against the spirit by which the Delegates of the
nations assembled at the Genoa Conference have been
animated."

The President (speaking in Italian) :

" I call upon M. Rossi, Delegate of Italy, to speak."

M. Rossi (Italy) (speaking in Italian) :

" The President of the Economic Commission has furnished
us with a clear explanation of, and an interesting commentary
upon, the resolutions which are submitted for the approval of
this Assembly.

' Thanks to his explanation we have all been enabled to
form an idea of the great importance of these resolutions, and
of the liberal spirit in which they are conceived.

' I have no wish to add anything to the succinct remarks
of the President of the Economic Commission, but perhaps,
in view of the fact that, as President of the Italian Delegation
in the Economic Commission, I have proposed and defended
the most liberal measures in questions of economic policy, I
may be allowed to dwell for a moment upon the great im-
portance of the resolutions which have been adopted, and
upon the immense advantages which may be derived from
them if they are accepted and unconditionally applied with-
out delay by the Governments.

" Gentlemen, if we compare the economic policies followed
by the various countries before the war with those which
have been followed since the war, and which are still un-
fortunately in force, we cannot but be grieved by the spirit of
protectionism, intolerance and, I would almost say, exclusion,
which prevails in the world of economics.

" Before the war, import and export prohibitions were
almost exclusively prohibited by commercial treaties. It was
recognized that all measures of restriction were incompatible
with economic co-operation between nations, tending as they
did to prevent the agricultural and industrial products of one
nation from entering the territory of others, and to prevent
the raw materials of one country from going freely to other

16*

244 The Genoa Conference

countries which had need of them. To-day, import and
export prohibitions established during the war for reasons of
prime necessity still exist in several countries, and are regarded
as essential for economic and financial reconstruction. Such
restrictions, however, form a barrier to international com-
merce characteristic of this disastrous pre-war period, and
at the same time a weapon of economic policy which is used
as often for offensive as for defensive purposes.

" Before the war even the highest Customs duties only
represented a small percentage of the value of the goods.
To-day some of the Customs duties in force actually exceed
the total value of the goods ; they are measures of prohibition
rather than of protection.

" Before the war it was an established principle that all
commercial treaties should be based upon the most-favoured-
nation clause ; it was recognized that sound international
trade must infallibly be based upon equality of treatment.
Since the war the economic policies followed by the various
countries have departed further and further from a principle
which is indispensable for free competition in the international
market and for the most advantageous results in matters of
general economy.

' What have been the effects, the results, of this policy of
economic exclusion ?

" We all know and regret such results. Whilst the coun-
tries which are economically weakest, and whose currency is
most depreciated, have required increased production and
export to improve their economic conditions and to secure
the appreciation of their currency, the barriers raised against
them by countries with stable currencies have obliged them
to reduce their production and to diminish their exports,
with the inevitable and well-known consequences of un-
employment, growing instability of their trade balance and,
finally, further depreciation of their currency.

' Thus the countries with a stable currency, thinking to
defend themselves against the competition of countries with
a depreciated currency, have only accentuated the condition

The Final "Plenary" 245

of temporary advantage which they hold over the latter as
a direct result of the instability of the exchanges. They have,
moreover, done their utmost to decrease the purchasing power
of countries with a depreciated currency, and by that means
to reduce their own possibilities of export.

" Countries with a depreciated currency, on the other hand,
thinking to defend their own economic system and increase
the va'ue of their currency, have surrounded themselves with
increasingly impenetrable barriers, thus providing countries
with a stable exchange with a new excuse for raising fresh
barriers against them.

" The vicious circle which connects debtor and creditor
countries must be broken ; step by step we must regain that
freedom in international trade by which alone we can emerge
from the crisis through which we are passing, and, when the
crisis is passed, ensure to the nations the greatest measure of
economic well-being.

" The proposals which I have had the honour of submitting
to the Conference on behalf of the Italian Delegation all make
for the recognition of that economic solidarity which unites
even countries which are politically divided, and for the
restoration, within reasonable limits, of the free competition
in the international economic field which is the source both
of economic well-being and of social progress.

" Allow me also to observe that the proposals submitted
by the Italian Delegation were not of a merely theoretical
character, but, as far as the difficult conditions at present
prevailing allowed, were entirely in harmony with the economic
policy which Italy has followed and intends to follow.

M Italy has also during the war been compelled, by reasons
connected with her most vital interests, to have recourse to
very rigorous restrictive measures. She was also, imme-
diately after the war, compelled to take account of the changed
economic and industrial conditions, and to adopt the necessary
Customs provisions.

" The restrictive measures adopted during the war have
now, however, been almost entirely abolished, and the

246 The Genoa Conference

economic and Customs policy adopted by Italy is the same
which in the past made possible fruitful economic agreements
between different countries.

" The proposals of the Italian Delegation have all been
approved in principle, but have been qualified by various
limitations and reservations which were rendered inevitable
by the different conditions prevailing in the various countries
represented at the Conference, and by the necessity of passing
gradually from a system of economic policy bristling with
barriers and obstacles, to the most liberal system possible.

"It is a most significant and important fact that the
liberal principles proposed by the Italian Delegation have met
with the unanimous approval of various countries, where
economic conditions are so different.

" The Genoa Conference constitutes not only the clearest
pronouncement as yet made in favour of a return to that
economic collaboration and solidarity which existed before the
war, and which contributed so powerfully to the progress of
Europe, but also the most authoritative condemnation of
the restrictive systems which have been one of the principal
causes of the evils from which we are all suffering.

" It is, therefore, legitimate to affirm that the work accom-
plished in the economic sphere by the Genoa Conference is
of incalculable importance, and is destined to exert the most
favourable influence on international trade.

" At the last sitting, my eminent colleague, M. Schanzer,
after calling attention to the efforts made by Italy to reduce
her budget expenses, made the following statement :

" ' We have considered the reduction of our expenditure,
not only as a duty towards ourselves, but also as a duty
towards other nations, whose normal economic life and
prosperity are intimately bound up with the economic and
political stability of each member of international society.'

" Allow me to say, Gentlemen, that these words may also
with perfect justice be applied to the economic policy which
Italy has consistently followed, and for which she has
endeavoured to win acceptance at the Genoa Conference.

The Final " Plenary ' 247

" Allow me also to express, together with the satisfaction
which I feel at the explicit and authoritative recognition given
by the Conference to these principles, the hope that each
country, not only in its own interest, but also in the interest
of the other members of international society, will renounce
that policy of economic exclusiveness which is contrary to the
material well-being of the nations and to their complete
pacification.

" Intimately connected with economic questions are labour
questions, and in regard to these I will ask you to allow me
to make certain statements on behalf of the Italian Delegation.

" The Italian Delegation, while welcoming the formulation
by the Economic Commission of solemn resolutions dealing
with labour questions, would have preferred that the attention
of all States should have been drawn in a more explicit manner,
and without reservation, to the desirability of adhering to
the draft Conventions and Recommendations adopted by the
International Labour Conferences.

" Italy cannot refrain from reaffirming on this occasion
her profound confidence in, and her unconditional sympathy
with, international social legislation, and with the Organization
created by the Peace Treaty for the elaboration of such
legislation. The votes given by the Italian Government
Delegates at the International Labour Conferences in favour
of the various draft Conventions and Recommendations,
represent for the Government and for the Italian nation a
moral obligation of the highest order ; and the Italian Par-
liament, which has recently authorized the Government to
ratify several of these Conventions, and particularly the
Washington Convention concerning Unemployment, is pre-
paring to examine the other conclusions of the Labour Con-
ference in the same favourable spirit towards the develop-
ment of international legislation for the protection of the
workers, which should animate democracies in general,
especially in countries interested in emigration and immi-
gration movements.

" The desire for an equitable and adequate protection of

248 The Genoa Conference

emigrants inspired a proposal submitted by the Italian Dele-
gation with the object of securing the traditional currents of
emigration, and special facilities for skilled workers.

" The Italian Delegation was most anxious that these
principles should be accepted, and is confident that they
will finally prevail in the future. Italy, for her part, is glad
to be able to state that her services of State supervision
of emigration, co-ordinated with the international labour
exchange and unemployment services, will enable her to
assist in the most effective manner in the rational employment
of the forces of labour.

" The Italian Delegation, which advocated a resolution
of sympathy for co-operative institutions, which was not
accepted by the Commission, desires finally to express its
gratitude for the co-operation in the work of the Genoa
Conference offered by the workers, who have made their
voice heard through the medium of the international co-
operative and trade union organizations, in which institutions
the workers cultivate a sense of their own responsibilities
and learn by experiment to appreciate the other factors
which contribute to production in close union with labour.

" Gentlemen, the fundamental principle inspiring all the
economic resolutions is the return to freedom of trade. The
fundamental principle inspiring the labour resolutions is the
moral and social elevation of the workers. These two great
principles constitute the basis of that economic and social
progress which, arrested for a moment by the Great War,
must resume its march and accelerate its course for the well-
being of humanity and the pacification of the nations."

The President (speaking in Italian) :

" I call upon M. Rathenau, Delegate of Germany, to speak."

M. Rathenau (Germany) (speaking in French) :
' The conclusion of the economic labours of this Conference
allows us to consider the historic value of a work which
will be more and more appreciated as the years come and go
and in return for which the gratitude of the whole of Europe
is secured for the Genoa Conference. Nevertheless, it would

The Final " Plenary " 249

be undue optimism to expect that the conclusion of these
labours can bring a remedy of a notable and immediate
kind to the crises from which the whole world is suffering.
The situation of the world will only be really improved
when the soundness of certain principles is recognized —
principles which have been clearly shown during the delibe-
rations of the Commissions, and with ever-increasing clear-
ness, although they have not been completely expressed
in the Resolutions adopted. Whilst confining myself within
the limits set to the labours of the Conference, I will try to
point out four truths which, although they have not been
expressly stated, seem to me to result from our deliberations,
and which, I believe, are the necessary foundations for the
re-establishment of the economic status of the world. The
first of these truths is the following : The total indebtedness
of the several countries is too great, compared to their pro-
ductive ability. All the leading countries of economic im-
portance find themselves enclosed in a circle of indebtedness
which makes them almost all, at the same time, creditors and
debtors. In their capacity as creditors these countries do not
know how much they will recover of the sums due to them.
In their capacity as debtors they do not know how much they
owe, and how much they will be able to pay. This is why
there is not a country to-day which can draw up a budget
based on real facts. There is not a country to-day which
can risk creating large new institutions to improve its national
economy and to fertilize the world's markets. There is not
a country which can hope to stabilize its budget and the rate
of its exchange, with the one exception of that great country
which is a debtor to nobody, and which is a creditor of all,
and without the help of which the final restoration of Europe
js impossible.

" More especially, the countries which are apparently over-
burdened with debt cannot obtain the means which they
need. On the one hand, no new creditor is willing to give
them new credits ; on the other, already overburdened with
debt, they would not dare to accept such credits. Never-

250 The Genoa Conference

theless, if the States were indebted one to the other, all these
debts would be proportioned to their productive capacities,
and would correspond, moreover, to their productive invest-
ments, whereas the debts that exist at present reach figures
in excess of those that the States in question are able to
reimburse over a period covering several decades. These
debts do not, therefore, represent financial realities. They
do, however, represent economic realities, inasmuch as they
hinder the process of world production.

" Consequently, the only way that remains open is the one
adopted by individuals in their economic relations, in cases
where the debts of an undertaking exceed its productive
capacity. That is to say, the only way is the gradual rehabili-
tation and reduction of indebtedness.

" The second of these truths, which has not been stated at
Genoa, seems to be the axiom that no creditor should prevent
his debtor from repaying his debts. When an individual
owes money to another, he can insist that the repayment
shall be made in a certain currency. It is the business of the
debtor to procure this currency, which within certain limits
can always be obtained on the world market. But when it
is a question of a country being indebted to another country,
it is not possible in the long run to reimburse these debts in
gold. If that country does not produce gold, or does not
possess enough gold, it can only effect repayment in goods.
Repayment in goods, however, is only possible in so far as
the creditor allows it. When the creditor objects to such
repayment in goods, the insolvency of the debtor will soon
follow. If the creditor, instead of facilitating, prevents this
method of payment by imposing Customs duties and other
obstructive measures, the total of the debt will be arbitrarily
increased, for it will be necessary to produce yet more goods.
The depreciation of the means of payment automatically
increases the total amount of the debt.

" Each country desirous of receiving payment, should there-
fore grant its debtors facilities of import such as will enable
them to reimburse their debts without unduly increasing them.

The Final " Plenary " 251

" The third truth has been brought out yet more clearly
than the others. It is that which is comprised in the theory
which says that world economy can only be re-established
with the re-establishment of an imponderable quantity, that
is to say, mutual confidence. But this confidence will only
return to the world when mankind is living in real peace.
If the present condition of the world is not one of war, it
nevertheless resembles war in many respects, and in any
case, it is not a real peace. Unfortunately, in many countries,
public opinion is not yet demobilized. The after-effects of
war propaganda have not yet disappeared, and they still
render the atmosphere heavy. That is why anyone who
trusts his money and his labour to a country has to run
the risk that circumstances beyond his control, the cause
of which cannot be sought in natural phenomena, but which
depends on political events, may in a short time modify or
damage the situation of the country in question. The world
is still far from having recognized that an impoverished
debtor needs to be treated kindly, and that he becomes
incapable of payment if his last resource — his credit — is
destroyed.

" Indeed, these imponderable forces which hinder exchange,
formerly so active in the process of world production and
consumption, are evident from the fact that the means of
world production have remained almost what they were
before the war. Even if we take into account all the distress-
ing and deplorable ravages of the war, and also of the period
since the war, we may still hold that more than ninety per
cent, of the total means of production of the world and of the
total system of world business still exists.

" As far as the enormous and deplorable destruction which
has occurred in the interior of Russia is concerned, it only
affects world trade to the extent of three per cent. In spite of
the terrible loss of human life occasioned by the war, even
the forces of human production have been preserved for the
most part : for human necessities have filled up the gaps
in a proportionate measure.

252 The Genoa Conference

" We can therefore say that the mechanism of the world
is not working, although the substance and the motive power
are almost intact. On the one hand, millions of labourers
are condemned to unemployment ; on the other hand, millions
of human beings are suffering from hunger. On the one hand,
enormous quantities of merchandise are accumulated and
unsaleable ; and on the other hand, there is a crying need for
this same merchandise. Whence come these phenomena ?
To say nothing of reciprocal indebtedness, which in itself
contains a psychological factor, these phenomena result from
other psychological factors, determined by the lack of real
peace and by the lack of mutual and universal confidence.
When we ask if the means exist to revive commercial exchanges
between the several countries of the world, and to start
once more the mechanism of world production, we come
inevitably to the fourth point, which has not been stated, but
which I wish to make.

" It will be seen that it is not sufficient to have the efforts
of one nation, or of two nations, to revive the whole of world
economy, but for this purpose we need the collaboration of
all nations. Thus, how is it possible, after a series of un-
paralleled destructions, for the world to be cured, unless all
the nations of the world consent to a common sacrifice ? Only
world-wide sacrifices can help this suffering world to recovery.
Reconstruction has never been possible without finding new
funds. Such funds, however, cannot be found so long as each
unit in the system of world economy is, with few exceptions,
*n debt. The first sacrifice that all should make should
consist in reducing the great circle of reciprocal indebtedness.
But there is a further sacrifice to be made : to use all efforts
to find the ample funds required for purposes of reconstruction,
either by means of universal and mutual credits, or by other
means, into the details of which we cannot go to-day.

" That the Genoa Conference has brought all the nations
of Europe together to discuss and to understand the bearing
of these questions, is a fact which will remain memorable in
the history of Europe. Another result of historic importance

The Final " Plenary " 258

is the fact that a rapprochement has been effected with the
great Russian people, so grievously tried, and that Russia
has been once more brought into contact with the other
European nations. The members of the German Delegation
are happy to have contributed to the best of their ability in
conciliating the several points of view. Germany hopes
that the labours of Genoa will form the basis for a real work
of peace between the East and the West. Thanks to the
protection and the assistance which Italy has granted to this
work of peace, this magnanimous nation has acquired a right
to the deep gratitude of the whole world. The history of Italy is
an ancient one, more ancient than that of most European
nations. More than one great world movement has had its
origin on this glorious soil, and once more let us hope that
the peoples of the world are raising their eyes and their hearts,
and not in vain, to this Italy, with the fervent hope which
Petrarch expressed in his immortal words :

" ' lo vo gridando : O pace ! pace ! pace ! ' "

The President (speaking in Italian) :

" If nobody wishes to speak, the debate on the motions is
closed. I will put the motions to the vote, with the reserva-
tions which certain Delegations wish to make.

" Since M. Tchitcherin wishes to speak, I call upon him to
do so."

M. Tchitcherin (Russia) (speaking in French) :

" Now that the moment has come for the Economic Com-
mission to pass its resolutions, I cannot refrain from recalling
the main objections which were formulated by the Russian
representatives in the course of the labours of the Commission.

" I cannot but repeat that the Russian Delegation finds
abnormal in the highest degree the fact that the composition
of the technical Committee which had to deal with questions
of labour should have been fixed by the personal decision of
the President of the first Sub-Committee."

M. Colrat (France) (speaking in French) :

" I wish to speak."

254 The Genoa Conference

M. Tchitcherin (Russia) (speaking in French) :
"... and the fact that amongst the members of this
Committee there should have been included no representatives
of Russia. The Russian Delegation has already protested
against its exclusion from the technical Committee. The
fact is all the more strange because the very constitution of
the Russian Republic is founded on labour organizations.
The results of this exclusion are visible. Chapter VI. of the
Report of the Economic Commission, which deals with labour
questions, opens with a general remark stating the importance
of the assistance of the workers in the economic restoration of
Europe. Yet we do not find in this chapter what would be
most necessary to the working classes. We do not find a
mention of the legislation for the protection of workmen,
leaving aside the question of unemployment. We do not find
either any proposal concerning co-operative societies, although
the latter are an instrument of the highest value for the
improvement of the conditions of the working classes. It is
to the highest degree to be regretted that, in the course of
the labours of the First Sub-Committee, the proposal about
co-operatives should have been rejected. But there is some-
thing else. Article 21, which mentions the Conventions of
the Labour Conference of Washington, deprives those Con-
ventions of a great part of their practical importance by
confirming the right of the members not to ratify them. This
final phrase of Article 21, which the Russian Delegation in
vain tried to suppress, is explained by the desire of certain
Governments, such as Switzerland, not to accept the eight-
hour day. The Russian Delegation considers the eight-hour
day as a fundamental principle of the welfare of the workers,
and raises a formal objection against the liberty explicitly
given to the Governments not to apply it. In the same way,
when the Conference was presented with a Memorandum of
the International Federation of the Amsterdam Trade Unions,
stating that a minimum of social justice as regards the workers
was the indispensable condition of the restoration of peace,
this Memorandum was not even taken into consideration.

The Final " Plenary ' 255

" The Russian Government, which does not recognize the
League of Nations, cannot either recognize its International
Labour Office. But this does not in any way modify its
point of view on the flaws in the decisions of the Economic
Commission on labour questions. All the other objections
or reservations which our Delegate has raised against the
decisions of the Commission remain in force so far as we are
concerned. I also repeat here specially the reservations
already made as regards the labours of the Second and the
First Commissions, regarding the full and entire freedom
of action which Russia will retain as regards the provisions
which entrust the League of Nations with official missions.
Lastly, the Russian Delegation must state that the general
impression left by the Report of the Economic Commission
is that it is shorn of that boldness which is indispensable if
it is really intended to undertake the work of general recon-
struction. A whole set of measures is needed, a new political
orientation such as I have sketched in its main lines at the
opening session of the Genoa Conference. It is with these
reservations and objections that the Russian Delegation,
while declining to accept certain details, accepts the Report
of the Economic Commission in its entirety."

The President (speaking in Italian) :

" I call upon M. Colrat, Delegate of France, to speak."

M. Colrat (France) (speaking in French) :

" The Russian Delegate having directly and personally
introduced the name of the President of the Commission into
the debate, I must answer him in two words. It is not exact
to say that the Russian Delegates were excluded from the
Sub-Committee on labour questions. What is right is that they
did not sit amongst the reduced Committee. I will state the
reason, and M. Tchitcherin will find that, if he was not in-
cluded, he was in very good company amongst those who did
not sit. The reason was this. We found that the Members
of the Russian Delegation came so rarely to attend the debates
on labour questions, that we thought that they were not
particularly qualified to take part in the discussion. As

256 The Genoa Conference

regards the general charges which have been brought against
the Commission, my colleague here will not permit me to
answer them in full. All I will say is this, that the Head of
the Russian Delegation is little qualified, in the present eco-
nomic state of his country, to come and try to give lessons to
other peoples."

The President (speaking in Italian) :

" I call upon M. Motta, Delegate of Switzerland, to speak."
M. Motta (Switzerland) (speaking in French) :
" I have listened hitherto in silence to the debate on the
Report of the Economic Commission. It was my intention
to keep silence to the end, in the desire to preserve on this
occasion a proper spirit of modesty. But an allusion has
been made, in the declarations of the Head of the Russian
Delegation, to the action of my country in the matter of the
Washington Conventions, and that allusion I cannot allow
to pass without comment. I would point out that the attitude
of the Swiss Government with regard to the Washington
Conventions is known. It has been loyally communicated to
the Labour Office. It has been communicated to the several
Commissions here, so that the attitude is really clearly known.
I cannot, however, allow this misunderstanding to which the
remarks of the Russian Delegate may have given rise to pass
without notice. While the Swiss Government considers that
the Washington Conventions are perhaps too schematic, too
cut-and-dried for the needs of the case, I wish to point out
that the eight-hours day exists in Switzerland in industries
and in the public services. But the Swiss Government wishes
to retain the right to modify, if necessary, and to see the
results of the legislation concerning hours of work, and to
make any modifications which experience may show to be
necessary in adapting that legislation to real needs. I would
point out that I am not here as a representative of a class. I
am here as the representative of the whole of my country, and
while my country may not consider that the present legislation
is final, though it may need amending and adapting to cir-
cumstances, I must point out that the Swiss Government

Schanxer, Italian Foreign .Minister

The Final " Plenary " 257

aims at a broad humanitarian policy, and that my country is
essentially a democracy — the oldest democracy in Europe —
and one in which the interests and needs of all classes, and
especially of the working classes, are fully taken into con-
sideration."

The President (speaking in Italian) :
" I do not think it is necessary to continue the debate.
The resolutions of the Economic Commission will therefore
be considered as adopted, with the reservations which are
noted in the Minutes of the Meetings of the Commission and
Sub-Commissions.

" These reservations will be inserted in the definitive
edition of the Report of the Commission.

" The Resolutions in question will form Annex 3 to the
Minutes of this Meeting.

THE FIRST COMMISSION

" We will now pass to the resolutions of the First Com-
mission.

" I call upon the Rapporteur, M. Schanzer, Delegate of
Italy, to speak."

M. Schanzer (Italy) (speaking in French) :
" I have the honour to submit for the approval of the
Conference the document which was approved yesterday by
the First Commission, and which refers to the continuation
at The Hague of the discussions begun at Genoa with the
representatives of the Russian Soviet Republic, with the
object of reaching an agreement on the questions of debts,
private property, credits, and of a pact of non- aggression.

" I think I should give the Conference a brief description
of the various phases of the discussion of the Russian ques-
tion, from the beginning up to the present time, and explain
how the Commission came to adopt the document which I
am submitting.

" The first phase of the discussion of the Russian ques-
tion began at the first meeting of the Sub-Commission, when
the Memorandum drawn up by the Allied Experts in London
was submitted to the Russian Delegates, as a basis for the

17

258 The Genoa Conference

settlement of the three groups of questions which it was
necessary to solve in order to reach a general agreement
with Russia, that is to say, liquidation of the past, condi-
tions for the future, and measures to facilitate an immediate
economic reconstruction of Russia.

" Private meetings took place between the Russian Dele-
gates and the representatives of the countries whose experts
had drawn up the Memorandum. During these meetings
it was endeavoured to settle questions relating to the liquida-
tion of the past.

" A short Memorandum, setting forth the principles for the
solution of the questions of debts and property, was drawn
up on April i5th, and submitted to the Russian Delegation,
which replied by the Note of April 20th.

" A special Committee of Experts was set up immediately
to continue the discussions with the Russian Delegation on
the basis of the Note submitted on April 20th.

" The Experts held four meetings, on April 22nd, 23rd and
24th, but it appeared clearly from their discussions that the
two parties were not yet within sight of agreement.

" On the basis of the document submitted by the Russian
Experts at the meeting of April 24th, and with the addition
of certain considerations dealing with the Russian problem
as a whole, and certain conditions which were essential for
a renewal of economic relations with Russia, a Memorandum
was drawn up and submitted to the Russian Delegation on
May 2nd. M. Tchitcherin replied to this Memorandum in his
note addressed to the President of the Sub-Commission on
the nth instant.

" This reply was considered inacceptable. The Sub-Com-
mission, however, discussed the possibility of setting up
Commissions of Experts to continue elsewhere the work
begun at Genoa.

" In the document which I have the honour to submit to
you, the Sub-Commission has, in fact, agreed to propose
the establishment of a non-Russian Commission and a Rus-
sian Commission, to meet at The Hague on June 26th, and

The Final " Plenary " 259

endeavour to solve the questions of debts, private property
and credits.

" The President of the Genoa Conference, in accordance
with the wishes of the Commission, will invite the countries
represented at Genoa to be present at the Hague meeting.
He has informed the Government of the United States of
America of the decision which has been reached, express-
ing the hope that it will take part in the Hague meeting.
Unfortunately, the Washington Government has felt itself
unable to accept the invitation to take part in the work at
The Hague.

' We all realize the great advantages of solving the Rus-
sian problem at the earliest possible moment. With this
object in view, the Commissions of Experts are to meet on
June 26th, and their work is to be limited to a period of three
months.

" In the document which deals with the establishment of
the Hague Commissions and lays down their programme of
work, the Commission has also included the pact of non-
aggression between Russia and the other Powers which accept
the proposal. This has been done in order to allow the
Commissions to work in an atmosphere of mutual confidence
and tranquillity : it is, moreover, an affirmation of the pro-
gramme of peace and pacification upon which the Conference
of Genoa has been based.

I

" The Powers mentioned above agree that a Commission
shall be appointed for the purpose of further consideration
of the outstanding differences between the Russian Soviet
Government and the other Governments, and for the purpose
of meeting a Russian Commission similarly empowered.

II

" The names of the Powers represented in the non-Russian
Commission, together with the names of the members of the
Commission, will be communicated to the Soviet Government,

17*

260 The Genoa Conference

and the names of the members of the Russian Com-
mission will be communicated to the other Governments,
not later than June 2oth.

Ill

" The matters to be dealt with by these Commissions
will comprise all outstanding questions relating to debts,
private property and credits.

IV

" The members of the two Commissions will be at The
Hague on June 26th, 1922.

V

" The Commissions will endeavour to arrive at joint
recommendations on the matters dealt with in Clause III.

VI

" In order to enable the work of the Commissions to be
carried on in tranquillity, and in order to restore mutual
confidence, engagements will be entered into binding the
Russian Soviet Government and the Governments now allied
with the Russian Soviet Government on the one hand, and
the other participating Governments on the other hand,
to refrain from all acts of aggression against their respective
territories, and to refrain from subversive propaganda.

'•* The pact to refrain from acts of aggression will be founded
on the observance of the existing status quo, and will remain
in force for a period of four months from the closing of the
work of the Commissions.

" The agreement against propaganda will bind all the
signatory Governments to abstain from interfering in any
way in the internal affairs of other States, from supporting
by financial or other means political organizations at work
in other countries, and also to suppress in their territory
attempts to foment acts of violence in other States, and
attempts which might disturb the territorial and political
status quo.

" As will be seen from the explanations which I have given,

The Final " Plenary " 261

it has not been possible in this Conference to arrive at a com-
plete solution of the problem which was confided to our
Sub-Commission. It is not necessary to go into the reasons
for this. They are chiefly of a practical order. We are
not, however, abandoning our task. It will be continued
by the Commissions which we propose should be formed.
Our confidence in the final solution of the great problem
remains unshaken.

" The torch of that confidence is not extinguished : Genoa
will pass it on to The Hague.

" Allow me to say one word more on the last part of the
Draft Resolution, that is to say, on the pact of non-aggres-
sion. As it stands, this pact is of a purely temporary character.
In order to make clear the obligations which the parties
were to undertake, it was found necessary to fix a limit
of time for the pact, which limit is connected with the labours
of the Commissions.

" But I desire to say plainly that, in proposing this tem-
porary pact of non-aggression, we cherish the strongest hope
that, at its termination, a more general and more permanent
pact will be substituted for it, and that the ideal towards
which we are working, the ideal of uniting all nations in
a single great organization for peace, will become a reality
within the shortest possible time."

The President (speaking in Italian) :

" I call upon M. Platijn, Delegate of the Netherlands, to
speak."

M. Platijn (Netherlands) spoke briefly in French.

The President (speaking in Italian) :

" I call upon M. Galvanauskas, Delegate of Lithuania, to
speak."

M. Galvanauskas (Lithuania) (speaking in French) :

" The obstacles to the reconstruction of Europe, whether
they are political or moral, do not consist merely in the non-
settlement of European relations with Russia. The Lithua-
nian Delegation believes it has performed its duty in em-
phasizing this fact before all the Commissions. It has pointed

262 The Genoa Conference

out the impossible position in which it is placed by reason
of the military front which Poland presents to it, so that it
cannot apply, as regards that State, the decisions of the
Conference regarding economic, financial and transport
questions. Poland, by the forcible act of General Zeligowski,
violated the Convention with Lithuania concluded at Suwalki,
and also its obligations towards the League of Nations. In
defiance of Treaties in force, Poland continues its military
occupation of Lithuanian territory, and the capital, Vilna."

The President (speaking in Italian) :

" The subject on which the Lithuanian Delegate is speak-
ing not being before the Assembly, I must ask him to sit
down."

M. Galvanauskas (Lithuania) (speaking in French) :

" That is why the Lithuanian Delegation is obliged to
make reservations as regards Clause VI. adopted by the First
Commission. This Clause appears to us to be inacceptable
by reason of the peril which would result from a legaliza-
tion, even if only temporary, of the territorial and political
status quo created in Lithuania by the aforesaid violations
of existing treaties and of international law.

" It is with sincere regret that we feel compelled to make
these reservations, the only cause of which is the policy of
Poland in regard to our country. The general policy which
Lithuania has followed has always been one of peace, and
we desire to declare solemnly that she will never abandon
that policy. The Lithuanian Delegation desires also to call
the attention of the Conference to the fact that its Govern-
ment has proposed, and now again proposes to Poland a
peaceful means for the settlement of these differences, in
conformity with law and existing agreements. Thus, the
Lithuanian Government recently proposed to Poland to appear
before the Permanent Court of International Justice. Un-
fortunately, however, Poland declined this invitation."

The President (speaking in Italian) :

" I must ask the Lithuanian Delegate not to persist in
addressing the Assembly.

The Final " Plenary " 268

" I believe I am interpreting the opinions of all in thanking
the Delegate of the Netherlands very warmly for the generous
way in which he has expressed the feelings of his Govern-
ment with regard to the reception of the Expert Commis-
sions which are to continue in his country the labours begun
at Genoa. I feel sure that the cordiality with which the
Delegate of the Netherlands has welcomed them is an excellent
augury for the success of the work which will be continued
there, and in the name of the Assembly, I thank him most
sincerely for what he has said.

" I now call upon M. Skirmunt, Delegate of Poland, to
speak."

M. Skirmunt (Poland) (speaking in French) :

" I do not want to enter into a controversy with the
representative of Lithuania. I merely wish to mention certain
facts. Negotiations were set on foot by the League of Nations
for the settlement of the Polish-Lithuanian dispute, and
terminated on January I3th. It was proposed to the two
countries that diplomatic and consular relations should be
established between them, and that the neutral zone should
be replaced by a provisional frontier line.

" We have accepted the two recommendations of the
League of Nations ; only yesterday, the League of Nations
again dealt with this question, and again recommended
that we should divide the neutral zone between the two
countries and send a Commission to the spot. The representa-
tive of Poland accepted the decisions of the Council of the
League of Nations. If the representative of Lithuania does
not think it possible, on his side, to accept paragraph VI. of
the proposal which is now before us, the Lithuania Govern-
ment will take the responsibility, but that will not in any
way affect the pacific attitude of Poland towards the Lithuanian
Government, and the sentiments of the Polish people towards
the Lithuanian people.

' We never attack, we are always ready to have neigh-
bourly relations with Lithuania, and even to recognize the
Lithuanian Government as existing de jure. Our feelings

264 The Genoa Conference

are entirely pacific ; I am anxious to state this and to declare
in all solemnity . . . ."
The President (speaking in Italian) :

" As this question was set aside at the meeting of the
First Commission yesterday, it is not within my power to
allow it to be taken up here.

" I will now call upon the Russian Delegation to state that
it accepts the resolutions read out by M. Schanzer, including
the pact of non-aggression contained in Article VI."
M. Tchitcherin (Russia) (speaking in French) :
' The Russian Delegation has stated, in the meeting of
the Commission, its attitude in this matter, and has given
all necessary explanations with regard to the resolutions
now submitted to the Conference. I do not wish to delay
our labours here this morning, and I therefore refer you
to the statements and reservations made before the Com-
mission, and declare that the Russian Delegation accepts
the resolutions, including Article VI, subject thereto."
The President (speaking in Italian) :
" I call upon the Delegate of Great Britain to make a
statement on the subject of the acceptance of the resolu-
tions before the Assembly, and of the pact of non-aggres-
sion."

Mr. Lloyd George (Great Britain) (speaking in English) :
" We accept the pact of non-aggression, with the elucida-
tion contained in the Minutes."
The President (speaking in Italian) :
" I call upon the Delegate of Canada to speak."
The Delegate of Canada (speaking in English) :
" The Representative of the Dominion accepts, with the
reservations and explanations given in the Minutes."
The President (speaking in Italian) :
" I call upon the Delegate of Australia to speak."
The Delegate of Australia (speaking in English) :
" 1 accept."

The President (speaking in Italian) :
" I call upon the Delegate of New Zealand to speak."

The Final " Plenary " 265

The Delegate of New Zealand (speaking in English) :

" I accept."

The President (speaking in Italian ):

" I call upon the Delegate of South Africa to speak."

The Delegate of South Africa (speaking in English) :

" I accept."

The President (speaking in Italian) :

" I call upon the Delegate of India to speak."

The Delegate of India (speaking in English) :

" I accept, with the reservations indicated by Mr. Lloyd
George."

The President (speaking in Italian) :

" In the name of the Italian Delegation, I wish to make
the following declaration :

" The Italian Delegation declares that the Italian Govern-
ment accepts the Resolutions submitted by M. Schanzer,
and undertakes, in the name of the Government of Italy,
the pledges mentioned under Article VI. of the said Resolu-
tions.

" I call upon Baron Hayashi, Delegate of Japan, to speak."

Baron Hayashi (Japan) (speaking in English) :

" The Japanese Delegation, in the name of the Japanese
Government, is happy to accept."

The President (speaking in Italian) :

" I call upon M. Schanzer, Delegate of Italy, to speak."

M. Schanzer (Italy) (speaking in French) :

" The following letter has been received from the Japanese
Delegation :

'* ' Mr. President, in the course of the discussions of the
Sub-Commission, the Japanese Delegation felt compelled to
make a reservation with regard to the words "and the other
Allied Governments " in paragraph i of Article VI. (non-aggres-
sion). Since then, the Japanese Delegation has reconsidered
the question in the light of the instructions received from its
Government. It notes the explicit statement made by the
President of the Sub-Commission, that the arrangement in
question does not affect in any way the position of Japanese

266 The Genoa Conference

troops at present in Siberia. It considers that not only does
the pact of non-aggression referred to above place no obstacle
in the way of a preliminary agreement of the same kind, but
also that the repetition of similar agreements may result in
strengthing mutual confidence, and consequently in con-
tributing to the establishment of peace.

" ' In a spirit of conciliation, realizing the great impor-
tance of reaching an unanimous agreement concerning the
work of the Conference, the Japanese Delegation is glad to be
able to state now that it can give its full assent on the point
in question, it being clearly understood that the President's
statement mentioned above is considered as being taken for
granted.'

(Signed) '"HAYASHI.

"'K. ISHII.

" 'K. MORI.'"

The President (speaking in Italian) :

" I call upon the Delegate of Austria to speak."

The Delegate of Austria (speaking in French) :

" The Austrian Delegation accepts."

The President (speaking in Italian) :

" I call upon the Delegate of Bulgaria to speak."

The Delegate of Bulgaria (speaking in French) :

" The Bulgarian Delegation accepts the proposals of M.

Schanzer."

The President (speaking in Italian) :

" I call upon the Delegate of Czecho-Slovakia to speak."
The Delegate of Czecho-Slovakia (speaking in French) :
" Czecho-Slovakia accepts the resolutions."
The President (speaking in Italian) :
" I call upon the Delegate of Denmark to speak."
The Delegate of Denmark (speaking in French) :
" The Danish Delegation accepts the proposals of M.

Schanzer."

The President (speaking in Italian) :
" I call upon the Delegate of Esthonia to speak."

The Final " Plenary ' 267

The Delegate of Esthonia (speaking in French) :
" The Esthonian Delegation accepts the proposals of M.
Schanzer, with the reservations which it made in the
Commission yesterday, as regards the Peace Treaty with
Russia."

The President (speaking in Italian) :
" I call upon the Delegate of Finland to speak."
The Delegate of Finland (speaking in French) :
" The Finnish Government accepts, with the same reser-
vations as those just made by the Esthonian Government."
The President (speaking in Italian) :
" I call upon the Delegate of Greece to speak."
The Delegate of Greece (speaking in French) :
" Greece accepts."
The President (speaking in Italian) :
" I call upon the Delegate of Iceland to speak."
The Delegate of Iceland (speaking in French) :
" Iceland accepts."
The President (speaking in Italian) :
" I call upon the Delegate of Latvia to speak."
The Delegate of Latvia (speaking in French) :
" The Latvian Delegation accepts, with the reservations
made by the Esthonian and Finnish Delegations."
The President (speaking in Italian) :
" I call upon the Delegate of Lithuania to speak."
The Delegate of Lithuania (speaking in French) :
" The Lithuanian Delegation confirms the reservations
which it has just made."
The President (speaking in Italian) :
" I call upon the Delegate of Norway to speak."
The Delegate of Norway (speaking in French) :
" The Norwegian Delegation, being without instructions
from its Government, abstains from voting, and reserves the
right of its Government to adhere later to the proposals made.
I should add that the Norwegian Delegation was not present
at yesterday's meeting of the First Commission, as was wrongly
stated in the printed report,"

268 The Genoa Conference

The President (speaking in Italian) :
" I call upon the Delegate of the Netherlands to speak."
The Delegate of the Netherlands (speaking in French) :
" The Government of the Netherlands accepts."
The President (speaking in Italian) :
" I call upon the Delegate of Poland to speak."
The Delegate of Poland (speaking in French) :
" The Polish Government accepts, with the reservation
which was included in the declaration which the Polish De-
legate made in the Sub-Commission, that it was understood
that the obligations imposed on Russia and Poland by the
treaty of Riga should remain in force."
The President (speaking in Italian) :
" I call upon the Delegate of Portugal to speak."
The Delegate of Portugal (speaking in French) :
" Portugal accepts."
The President (speaking in Italian) :
" I call upon the Delegate of Rumania to speak."
The Delegate of Rumania (speaking in French) :
" Rumania accepts."
The President (speaking in Italian) :

" I call upon the Delegate of the Serb-Croat-Slovene King-
dom to speak."

The Delegate of the Serb-Croat-Slovene Kingdom (speaking
in French) :

" The Kingdom of the Serbs, Croats and Slovenes accepts."

The President (speaking in Italian) :

" I call upon the Delegate of Spain to speak."

The Delegate of Spain (speaking in French) : " Spain accepts."

The President (speaking in Italian) :

" I call upon the Delegate of Sweden to speak."

The Delegate of Sweden (speaking in French) :

" The Swedish Government accepts the proposed resolutions."

The President (speaking in Italian) :

" I call upon the Delegate of Switzerland to speak."

The Delegate of Switzerland (speaking in French) :

" On behalf of the Swiss Government, I accept the proposed

The Final " Plenary " 269

decisions. I consider them completely in accord with the
peaceful spirit of my country, and I hope that they are the
beginning of a definite future peace."
The President (speaking in Italian) :
" I call upon the Delegate of Hungary to speak."
The Delegate of Hungary (speaking in French) :
" Hungary accepts."
The President (speaking in Italian) :
*' I call upon the Delegate of Albania to speak."
The Delegate of Albania (speaking hi French) :
" On behalf of its Government, the Albanian Delegation
accepts."

The President (speaking in Italian) :
" I call upon the Delegate of Belgium to speak."
The Delegate of Belgium (speaking in French) :
" On behalf of the Belgian Delegation, I declare that I cannot
at present accept the proposed resolutions. The Belgian
Delegation, however, under reserve of the explanations which
it has already furnished, undertakes to recommend to its
Government the adoption of the proposed resolutions, in-
cluding Article VI."
The President (speaking in Italian) :
" I call upon M. Barthou, Delegate of France, to speak."
M. Barthou (France) (speaking in French) :
" In conformity with the procedure established at Cannes,
the French Delegation declares that it will recommend to the
Government of the Republic the adoption of the resolutions of
the First Commission."
The President (speaking in Italian) :

" All those nations which decide to take part in the future
Conference are considered as having accepted the resolutions,
including Article VI.

" On behalf of the Conference, I appoint members to take
part in the Commissions mentioned under Article I. of the
motions approved.

" Invitation is made to the following Powers :
" Belgium, France, Japan, the British Empire (including

270 The Genoa Conference

Canada, Australia, New Zealand, South Africa and India),
Italy, Russia, Albania, Austria, Bulgaria, Czecho-Slovakia,
Denmark, Esthonia, Finland, Greece, Iceland, Latvia, Lithua-
nia, Luxemburg, Norway, Netherlands, Poland, Portugal,
Rumania, Serb-Croat-Slovene Kingdom, Spain, Sweden,
Switzerland and Hungary.

" I now call upon M. Schanzer, Delegate of Italy, to
speak."

M. Schanzer (Italy) (speaking in French) :

" The First Commission adopted yesterday the following
motion, which I submit for the approval of the Assembly :

" ' The President is invited to take the necessary steps, in
agreement with the Government of the Netherlands, for the
convocation of the Commissions at The Hague.' "

The President (speaking in Italian) :

" If there are no objections, the motion just read by M.
Schanzer will be adopted."

The motion was adopted.

The President (speaking in Italian) :

" The Report of the Commission on Credentials is now before
you for approval. If no member wishes to speak, I shall
consider that the Report is adopted."

The report of the Commission on Credentials was adopted.

The President (speaking in Italian) :

" I call upon M. Schanzer, Delegate of Italy, to make a
communication on the subject of the Sanitary Convention at
Warsaw."

M. Schanzer (Italy) (speaking in French) :

" The President of the Council of the League of Nations has
duly sent a telegram to the President of the Conference asking
him to submit to the Conference the resolutions adopted at the
Warsaw Health Conference. Poland, in her capacity as an
Inviting Power at the Health Conference, has also sent a note
to the same effect to the President of the Sub-Commission of
the First Commission.

" We submitted the note from Poland and the telegram from
the President of the Council of the League of Nations to a

The Final " Plenary " 271

meeting of the Inviting Powers, who agreed to submit to the
Conference the following Draft Resolution :

" ' The Conference approves the principle of the anti-epidemic
campaign for European hygienic relief adopted at the Warsaw
Conference, and recommends the European Governments
represented at Genoa to discuss their application immediately,
and for this purpose to appeal to their respective Parliaments
for the necessary funds.'

" It is certainly not the duty of the present Conference to
make a further examination in detail of the results of a technical
investigation carried out carefully with the assistance of the
experts of all the States concerned. But this Conference, by
accepting the recommendations of the Warsaw Conference,
will prove that, in spite of the difficulties which arise from
political questions, and from the inevitable divergences of
opinion in discussing a solution of the various questions, it is
unanimous not only in the desire to bring about the economic
reconstruction of Europe, but also in the wish to apply by
common agreement all the technical measures which con-
stitute the essential conditions of and the first steps towards
that reconstruction."

The President (speaking in Italian) :

" I call upon M. Tchitcherin, Delegate of Russia, to
speak,"

M. Tchitcherin (Russia) (speaking in French) :

" The Russian Delegation stands by the amendment on
epidemics moved in the Conference by the Russo-Ukrainian
Delegation, which objected to the scheme proposing to entrust
one of the organisms of the League of Nations with the task of
carrying out these resolutions. The Russo-Ukrainian Delega-
tion asked that, instead of the League of Nations, an inter-
national commission should be set up for the purpose of
carrying out these resolutions. As you know, Russia has not
recognized the League of Nations, and we think that a body on
which Russia would not be represented could not usefully
undertake this work. We beg, therefore, to move again the
amendment which we have already mjovedj that a special

272 The Genoa Conference

commission, and not the League of Nations, be entrusted with
the task of carrying out these resolutions."

The President (speaking in Italian) :

" The remarks of the Russian Delegation have been noted,
and will be recorded hi the Minutes. As there are no other
objections, the motion, as proposed by M. Schanzer, is con-
sidered as adopted.

" I call upon M. Schanzer, Delegate of Italy, to speak."

M. Schanzer (Italy) (speaking in French) :

" The Joint Commission of the International Committee of
the Red Cross and of the League of Red Cross Societies, and
the President of the Italian Red Cross, have sent to the Presi-
dent of the Genoa Conference a Note containing the proposals
adopted during the Plenary Meeting of the Tenth International
Red Cross Conference at Geneva, and a Resolution which they
recommend for adoption by the Genoa Conference. These
documents were distributed to all the Delegations on May I5th,
and were submitted to a meeting of the Inviting Powers on the
same day. The Inviting Powers have decided to submit the
following Draft Resolution for the approval of the Con-
ference :

' ' ' The Genoa Conference resolves to refer to the League of
Nations the Memorandum which the Mixed Commission of the
International Committee of the Red Cross and of the League
of Red Cross Societies and the President of the Italian Red
Cross submitted on May 4th, 1922.' '

The President (speaking in Italian) :

" I call upon M. Tchitcherin, Delegate of Russia, to speak."

M. Tchitcherin (Russia) (speaking in French) :

' ' The Russian Delegation heartily supports the proposal to
complete the activity of the Red Cross by giving it functions
such as the preservation of international health and the relief
of distressed peoples. Russia recognizes the very high value
of the humanitarian work undertaken by the Red Cross, and
the immense services rendered to the nations in time of war.
By broadening its activity, the Conference would make it
easier for the Red Cross to render to peoples in distress, in new

Dr. Wirth. German Chancellor Chief German Delegate

ITofactfaye -1-.

The Final "Plenary " 278

fields of its activity, the same services as it has been able to
render in time of war. Therefore the Russian Delegation
supports the amendment, but opposes the reference to the
League of Nations, which is not recognized by the Russian
Government."

The President (speaking in Italian) :
1 The Minutes will take note of the objection made by the
Russian Delegation to referring the question of the Red Cross
to the League of Nations.

" If no one else wishes to speak on the subject, the motion
will be considered as adopted."

The motion was adopted.

The President (speaking in Italian) :

" I call upon Mr. Lloyd George, Delegate of the British
Empire, to speak."

Mr. Lloyd George (British Empire) (speaking in English) :

"Mr. President, we have now come to the end of one of the
most remarkable Conferences ever held in the history of the
world. The Genoa Conference will be for ever an inspiring
landmark on the pathway of peace. Before we separate, I
feel that it is a pleasure and a privilege to us who have come here
from other lands, to adopt a resolution of thanks, first of all to
our President, for the tact and good-humour with which he has
presided over our discussions ; to M. Schanzer, for the very
arduous and anxious labours which he has undertaken on our
behalf, and, if I may say so, especially for the skill and tact
with which he has piloted us through the shoals and rocks and
reefs of the First Commission. We also owe a debt of gratitude
to the people of Italy, for a measure of hospitality which is
worthy of a great and generous people. Never has Conference
been better received. We owe also a debt to the city of Genoa
for a reception which is worthy of a great and renowned city.
Italy, in a desire to extend hospitality to us, has shown us
every specimen of weather which she can command. We have
had, of course, as you would naturally expect in Italy, sunny
skies. But we have also had some of the angry and cold
tramontana ; we have had the gloomy and depressing sirocco ;

18

274 The Genoa Conference

we have had some thunderstorms ; but it has all ended to-day
in blue skies. That is the history of the Conference.

" But you need all kinds of weather to make a good harvest,
and if you look at what has been accomplished at Genoa, you
will find that we have reaped and garnered fine crops. There
is the great pact of peace ; there are the reports and recom-
mendations of the Commission on Finance, the Economic
Commission, and the Transport Commission, all full of valuable
recommendations, which, if they are adopted and pursued,
will help to restore prosperity and vigour to the depleted veins
of Europe.

" The Conference would have justified its existence if it had
only been for the work accomplished by these three Commis-
sions. It is true that their task has been overshadowed by
more controversial issues. That is what always happens when
any great controversial subject is under discussion. But
those of us who are acquainted with the tasks of legislation
know too well that controversial legislation is not always the
most fruitful, and that is equally true perhaps of the tasks of
this Conference. There is a real danger that, owing to the
concentration of the thoughts of the Conference, and of the
minds of people, upon the more debatable and dialectical part
of our work, the quieter work, which is so vital to the interests
of our peoples, might be overlooked. The recommendations
of the Commissions contain matters of the deepest moment for
the restoration of the economic vitality of Europe, and I
sincerely trust that the mere printing and circulation of these
reports will not be the end of them. If it is, they will simply
add to the paper currency of which the world has already had
too much. They have to be converted into gold by the alchemy
of action, and we shall each of us, when we go home, bring
them to the notice of those who are responsible for directing
the affairs of our respective countries, and by that means help
to restore healthier economic conditions in Europe.

" But still, I will not say the interest, but the real excite-
ment of the Conference, has centred in another issue, in the
question of the relations of Russia with the outside world, and

The Final " Plenary " 275

of the assistance which the outside world is prepared to render
in order to restore that devastated country, and to rescue its
population from conditions which, in many cases, are conditions
of deep misery and distress. It is a problem full of danger and
difficulty, and if I dwell a little upon it, I do so because we
propose to continue our examination in another month's time
in another form. It is surrounded by a jungle of prejudices,
swarming with very wild passions, and therefore dangerous to
approach. Let me say this about the Conference, and the way
in which it debated that question. The discussions in them-
selves have demonstrated the value of International Con-
ferences. Here is a question which has created many political
crises in different countries, which has provoked wars and
revolutions in two continents, debated in the Conference in an
atmosphere of calm and courteous investigation. What better
justification could you have for conferences than that ? And
all you have got to do, in order to know how valuable con-
ferences are, is to consider the contrast between the tone of
our deliberations and the tone of some of the comments upon
those deliberations. You might have imagined from some of
them that we have come here, not to promote a general peace,
but to organize a general Armageddon, and, if our discussions
had been conducted in that spirit, most of us would have
passed from the Palazzo Reale to the Campo Santo.

" But our discussions were carried on in an atmosphere of
calm and quiet. What progress have we made towards the
solution of this problem ? Considerable progress. For the
first time, Europe has faced that difficulty and not shirked
it. Half your difficulties vanish the moment you face them,
and the other half disappear if you continue to face them.
That is what we have decided to do. We have decided to
continue the examination of this problem, in order to struggle
through, and that is the most courageous decision taken by
this Conference. With a full knowledge of the magnitude,
the complexity, and the perils surrounding the problem, we
have decided deliberately to do our best to struggle through.
That is a decision worthy of a great Conference of Nations.

18*

276 The Genoa Conference

We have not gone as far as the most sanguine of us expected,
but we have gone further than doubters ever hoped or wished
to go. There is no goal worth reaching which is as near as it
appears to the hopeful, or as remote as it seems to the timid,
and that is equally true of this object. The discussions are to be
resumed in a different place, under different conditions, in a
different manner, and, I hope, with a different result. We have
a month for reflection on the difficulties revealed in this Con-
ference, before we resume those discussions. I sincerely hope
that that month will be utilized with a view to discovering and
suggesting solutions for these difficulties.

" I should like to say one word in that respect upon the
Russian Memorandum of May nth. We are making no reply
to it, but we cannot allow it to pass without one sentence. I
do so, not in order to prolong the controversy — because the last
thing I wish to do is to end these proceedings on a controversial
note — but, as one who has taken a very leading part in en-
deavouring to secure better relations between the East and the
West of Europe, I should like to utter one word of warning.
I do not know what the effect of that Memorandum was in
Russia, but I know that the effect outside Russia was
disastrous. It produced a reaction against the spirit of settle-
ment, and, if it were the last word to be uttered by the Russian
Government, I should really despair of accomplishing much at
The Hague. I am referring to the Memorandum of May nth.
Russia needs help. Europe and the world needs the produce
which Russia can contribute. Russia needs the accumulated
wealth and skill which the world can place at its command, to
restore it. Russia cannot recover for a generation without that
help. Europe is more and more filling up the gap left by
Russia. Russia needs more and more the help which the
world can give, and the world is anxious to give it. Either
from pride or from prudence, we have not, in any of these
discussions, referred to the fact that, even at this moment,
there are millions in Russia standing on the brink of famine
and pestilence, who may perish without help. If Russia needs
help she can get it. But will the Russian Delegation allow

The Final " Plenary " 277

me, in a friendly spirit, to say one word ? If Russia is to get
help, Russia must not outrage the sentiments — if they like,
let them call them the prejudices — of the world.

" There is a real sympathy for Russia's condition. But
what are these prejudices ? I will just name one or two,
because they were all trampled upon in the Memorandum
of May nth. The first prejudice we have in Western Europe
is this, that if you sell goods to a man you expect to get paid
for them. The second is this, that if you lend money to a
man and he promises to repay you, you expect that he will
repay you. The third is this. You go to a man who has
already lent you money, and say, ' Will you lend me more ? '
He says to you, ' Do you propose to repay me what I gave
you ? ' And you say, ' No, it is a matter of principle with me
not to repay.' There is a most extraordinary prejudice in
the Western mind against lending any more money in that
way. It is not a question of principle. I know the revolu-
tionary temper very well, and the revolutionary temper never
acknowledges that anybody has got principles, unless he is
a revolutionary. But these prejudices are very deeply rooted ;
they are rooted in the soil of the world ; they are inherited
from the ages ; you cannot tear them out. And if you are
writing a letter asking for more credits, I can give one word
of advice to anybody who does that. Let him not, in that
letter, enter into an eloquent exposition of the doctrine of
repudiation of debts. It does not help you to get credits. It
may be sound, very sound, but it is not diplomatic.

" Now I have only one or two more words to say. Europe
is anxious to help, Europe can help, Europe will help. But
Russia must, in her dealings with us, accept the code of
honour which is an inheritance, which has come to us from
centuries, from generations of hard-working and honest people.
It has struck deep into the soil of the world, and not even the
Russian tornado has split one fibre of a single root of those
prejudices, upon which our system depends. I do implore
you, as a friend of Russian peace, as a friend of co-operation
with Russia, as one who is in favour of going to the rescue of

278 The Genoa Conference

those great and gallant and brave people, I implore the Russian
Delegation, when they go to The Hague, not to go out of
their way to trample upon those sentiments and principles
which are deeply rooted in the very life of Europe.

" At Cannes, we threw out the life-line. We have not yet
drawn it in, as I thought we might ; neither has it been
snapped ; neither has it been let go. It is still there, and we
would like to draw all the distressed, all the hungry, all the
suffering in the East of Europe back to life, with all the help
that the accumulated energy and skill of other lands can give.

" We have signed a pact of peace. It is a provisional
one. It is for months — no, it is for more than that. We
have decided to have peace amongst warring nations. Once
you establish it, nations are not going back upon it. We
have decided to give peace a trial on our hearthstones, and
when she has been there for seven months, we will not turn
her out again. The psychological effects upon the peoples
of the world will be electrical. The thrill of peace has gone
through the veins of Europe, and you are not going to get
nation lifting up hand against nation again.

" There has been nothing more striking in this Conference
than the deep, passionate desire not to have a rupture, not
to have a quarrel, but to live in peace and amity together.
Believe me, peace is recovering her gentle sway over the hearts
of men, and in this Conference, by this pact which we have
adopted to-day, we have paid homage to her sceptre."

The President (speaking in Italian) :

" I call upon M. Barthou, Delegate of France, to speak."

M. Barthou (France) (speaking in French) :

" Gentlemen, the voice of France has already been heard
in this debate with a clearness and sincerity which has been
acknowledged by you all. I should not rise to echo these
words if it were not my duty to associate myself with the
thanks, wishes and hopes which Mr. Lloyd George has so
eloquently voiced. This duty is not inspired by a mere feeling
of courtesy or diplomacy. I feel its necessity deeply. On
behalf of the French Delegation, I must offer a most cordial

The Final " Plenary " 279

and hearty tribute of gratitude to the Italian Government.
To Italy, that great and noble country, I tender my thanks.
May I be allowed to say that, since the days of my youth,
I have had for Italy a profound sympathy and friendship,
which has never failed for one hour, and it has therefore been
for me a great pride and pleasure that my sentiments are in
accord with the attitude adopted by my country. We have
all experienced once more the generosity of Italy. Here at
Genoa, we have been so well received and cared for, that
during six weeks we have been able to walk abroad in the
streets of this living, swarming and crowded city without having
heard one single word, without seeing one single gesture that
might seem lacking in courtesy and good-will. Our thanks
are offered to Genoa and to the Italian Government, whose
task has been so difficult and has been accomplished with
such success. Thanks also are due to the Italian Council for
the liberality with which they have carried out their task.
We also thank the Minister for Foreign Affairs who, in the
course of our negotiations, has repeatedly proved his tact,
skill and prudence, in bringing the proceedings to a successful
conclusion.

" After six weeks of hard work, there seems to be some bold-
ness in writing down on the Agenda the words ' Closing
Speeches/ whereas the fear might have been felt that ' rup-
turing speeches ' were more probable.

" You have not heard one single speech of rupture, and
you will not hear one. Thirty-four States answered the
invitation sent from Cannes on April loth. Thirty-four
States attended the opening of this Conference, and thirty-
four States are still present. Great progress has been
realized. Mr. Lloyd George correctly described the tone of
our deliberations ; he rightly praised the pact of non-aggres-
sion. Since we knew that pact was to be discussed, we
carefully refrained from using any words of an aggressive
character as regards our neighbours. We have succeeded.
The Commissions have reached satisfactory conclusions. As
Mr. Lloyd George said, the pact would be nothing if it were

280 The Genoa Conference

only words on paper, if the Governments had not the deliberate
intention of carrying it out. At this point, may I express
the absolute and loyal intention of the French Government to
put these resolutions into practice, and to make of them an
actual reality. Mr. Lloyd George mentioned the arduous
and difficult nature of the question of relations with Russia,
which the Conference has had to tackle. I am in rather a
more difficult position than Mr. Lloyd George. I took part
in unofficial conversations of a protracted nature with the
Russian Delegation, in order to prove the earnest desire of
my Government to collaborate in solving the problem. In spite
of that, however, I have been burnt in effigy at Petrograd.
Luckily, it was only my effigy which was burnt. In spite of
this gesture, which was rather too symbolical, I am not going
to say one word which might seem to be hostile to the Russian
Delegation. The only thing that matters is that there is a
nation yonder which is suffering, and it is our duty to rush to
her help. Humanity would never have made a single step
forward if people had always asked, ' What is your Govern-
ment ? What is your religion ? What is your social system ? '
before giving assistance. When men are suffering, it is the
duty of the rest of mankind to go to their help. The French
Government cannot forget the immense services rendered by
Russia during the first three years of the war. The Russian
nation must know that we remain faithful to this pact of
gratitude, and that we shall do everything in our power to
alleviate their sufferings. You have heard a great statesman
and a great orator speak of landmarks on the road to peace.
This means that we are still on the way, going together towards
our common goal. There are other stages, other landmarks,
still to come. The question is now whether we shall all
march together, animated by the same feelings, and inspired
by the same idea of solidarity and fellowship. I have listened
to what M. Rathenau, the Minister of Foreign Affairs of
Germany, has said. I will not dispute the sincerity of his
remarks ; I will only say that I appreciate their finesse and
prudence. He spoke of demobilizing public opinion. I

The Final " Plenary " 281

suppose he was referring to the warlike spirit. Well, let him
be of good cheer ; I can once more bring him a word from
France. France, which did not want the late war, is ardently
and passionately attached to peace, and to that peace we are
all tending with the same heartfelt desire. The health of
Europe has been seriously compromised and its balance upset,
and that can only be restored if we are all inspired by a
spirit of loyalty and solidarity, and if we show the same
respect for order, honour and our pledged word. Is it still
permissible to ask whether we wish for peace ? Of course
we do. We are among those men of goodwill who wish for
peace — ' et in terra pax hominibus bonae voluntatis.' We
are all men of goodwill, and together we shall succeed in
imposing peace on Europe and on the world."

The President (speaking in Italian) :

" I call upon M. Banffy, Delegate of Hungary, to speak."

M. Banffy (Hungary) (speaking in French) :

" In the name of the Hungarian Delegation, I wish to
thank the nations here assembled for the interest they have
shown in the great questions of justice and equality which
concern my nation so closely, and I wish to thank the Italian
Government for the cordial way in which they have received
our Delegation."

The President (speaking in Italian) :

" I call upon M. Stambulisky, Delegate of Bulgaria, to
speak."

M. Stambulisky (Bulgaria) (speaking in Bulgarian) :

" In the name of my country, a country that has greatly
suffered, I wish to thank the promoters of the Genoa Con-
ference, and to say that by this act they have accomplished
a great deed, that will render their names immortal — the
most noble deed that could have been effected for the nations
that have suffered so much from the war. In spite of criti-
cisms, I may say the Genoa Conference has reached deeply
humane results ; it has carried the patient from the battle-
fields to the bright galleries of peace ; it has discovered the
illness from which he was suffering ; it has written the recipe

282 The Genoa Conference

that will cure him, and has found the means of applying it.
On this point, the Conference evidently encounters diffi-
culties, which do not arise from a lack of goodwill but from
the fact that some of the necessary drugs are not to be found
at Europe's chemists. To obtain assistance, we appeal to
the powerful nation overseas, America. We shall find a great
quantity of drugs for the use of Europe at the American
chemists. The Bulgarians have a proverb which says, ' Help
yourself first, and then you will be helped.' Europe must
therefore help herself first, and America will help her after-
wards. America will and must come to our assistance. She
is a country of humanitarians and philanthropists. She once
listened to the voice of the victorious nations and took part
in the war to hasten its end. Now she will listen to the voice
of those who were not on the winning side, those who suffered,
and she will return and hasten the work of peace. The Genoa
Conference has realized what was necessary and possible ;
we have to leave the rest to time. We must know how to
wait. War, peace and all the rest must pass through the
process of time. The principle of the peace of the world has
been established ; it will now develop and give good results.
" We, representing one of the most sorely tried nations,
are satisfied that the Genoa Conference has done much good.
Bulgaria thanks the Conference. When an unhappy people
are satisfied, they who constitute the majority of the world,
it is a proof that what has been done here is of world-wide
importance. Once again I wish to express the gratitude of
Bulgaria to the promoters of the Conference. I would also
like to thank Italy for her splendid hospitality. She has
appeased the nervous system of all the Governments ; the
people and the Government of Italy have done everything to
lighten our task. They have won our hearts, and we shall
leave Genoa strengthened and brightened by the hope of
peace, gladdened by the hospitality of Italy."
The President (speaking in Italian) :

" I call upon Baron Hayashi, Delegate of Japan, to speak."
Baron Hayashi (Japan) (speaking in English) :

The Final "Plenary" 283

" I fully and most heartily associate myself with previous
speakers in thanking the Italian Government, its Delegates,
and the city of Genoa itself. Several centuries have passed
since Genoa's great son, Columbus, went out to find the East.
Now the East is here to pay its tribute.

" A word about the Conference. To borrow the expression
of Mr. Lloyd George, we have had a certain amount of snarling,
but much good work has been done. If I may be allowed to
say so, that has been largely owing to the moderate and wise
attitude of our Russian friends. Their attitude has been
much more moderate than I expected. I hope that at the
next Conference, at The Hague, they will assume an even
wiser and more prudent attitude. It is only such an attitude
which, to my mind, will be helpful, and which will bring help
from other countries in Europe, and in future days — perhaps
in the near future — from America."

The President (speaking in Italian) :

" I call upon M. Tchitcherin, Delegate of Russia, to speak."

M. Tchitcherin (Russia) (speaking in French) :

" Whilst fully endorsing the vote of thanks to the Italian
people and Government, and to the City of Genoa, and whilst
recognizing the entire goodwill of many of the nations taking
part in the Conference, the Russian Delegation feels obliged,
at this stage of our work, to submit a few general considera-
tions on the results of the Conference.

" The Russian Delegation was justified in its assertion,
made at the beginning of the Conference, that the sole fact
of convening all the European countries, without distinction
of victor or vanquished, and without discrimination between
opposing systems of property, was a memorable event, which
was destined to be a source of real advantage to the estab-
lishment of universal peace, and to the economic reconstruction
of Europe.

" It cannot, however, be denied that the results of the
Conference do not fulfil the great expectations which it aroused
amongst the peoples of all nations. What the Russian Dele-
gation desired, and what has been unfortunately lacking at

284

the Genoa Conference, was a bold step towards new political
and economic methods, a work of creation and construction,
the establishment of new systems. At the opening meeting
of the Conference, the Russian Delegation sketched out a
system which, in its opinion, would have opened a new road
to Europe, and made general European reconstruction possible.
We have been prevented from submitting to the Conference
the question of disarmament, as well as certain other questions.
These factors of a single system were, however, intimately
bound up with the creative and constructive measures which
we proposed. Having once refused to adopt this attitude,
the Conference has not been able to add anything to existing
facts, or to the resolutions adopted by previous conferences,
except to a small and insufficient extent. It has been unable
to maintain the level of the principles set forth hi the speeches
at the first meeting, which proclaimed that there was no dis-
tinction between victors and vanquished, and that Sovietists
and capitalists were upon an equal footing. These, in our
opinion, are the causes of the unsatisfactory results of the
Conference.

" We hope that this experience will bear fruit. The ques-
tions which are usually included in the expression ' Russian
problem ' can only be satisfactorily solved if all concerned
will consider them from our point of view of the equality of
rights of the countries which have two different systems of
property, a point of view which is, as a matter of fact, that
of the first resolution of Cannes ; we are anxious that this
principle should be adopted by all who take part in the dis-
cussions at The Hague, for the brilliant exposition of the
opposite theory, given by the Prime Minister of Great Britain,
who has unexpectedly raised the question upon which we are
divided, will not succeed in converting the Russian people
to his ideas, any more than the invading White Armies suc-
ceeded in doing so. The British Premier tells me that, if my
neighbour has lent me money, I must pay him back. Well,
I agree, in that particular case, in a desire for conciliation ;
but I must add that if this neighbour has broken into my house,

The Final " Plenary " 285

killed my children, destroyed my furniture and burnt my
house, he must at least begin by restoring to me what he has
destroyed.

" We went still further. We should have been satisfied if
we had received sufficient assistance to enable us to carry
out what was imposed upon us. But the other side did not
take the same view. However, we continue our efforts for
conciliation. The Russian people is profoundly desirous of
peace and collaboration with other nations, but, I need
hardly add, on a basis of complete equality.

"If we are still hopeful with regard to the prospects of
general peace, it is due in a large measure to the expressions
of deep and warm sympathy which we, as well as the other
Delegations, have received from the whole of Italian society,
and from the great masses of the Italian people. The spon-
taneity and the warmth of the marks of sympathy which the
Russian Delegation has received in Italy are to us the most
reassuring sign that, in the midst of all the antagonisms and
all the complications of to-day, the vast majority are earnestly
aspiring to general peace. The Genoa Conference will be
a milestone of the greatest significance along the road to peace."

The President (speaking in Italian) :

" I call upon M. Bratianu, Delegate of Rumania, to
speak."

M. Bratianu (Rumania) (speaking in French) :

" On behalf of the Rumanian Government, the Czecho-
slovak Government, and the Government of the Serb-Croat-
Slovene Kingdom, I am happy to add my thanks to those
of the countries which have already expressed their gratitude
to the Inviting Powers, the officers of the Conference, the Pre-
sident of the Conference, and the Presidents of the Commis-
sions, for the work of peace carried out, and the agreement
obtained at Genoa. We have been proud to collaborate in
this work, and we congratulate ourselves upon the work
which has been done in the cause of world peace."

The President (speaking in Italian) :

" We have reached the end of our labours, and I have the

286 The Genoa Conference

honour of extending the farewell salutation of Italy to the
Delegates gathered here.

" It may be well to look back over the course we have
travelled, and to take stock of the work accomplished by
the Conference. But before doing this, allow me to express
the great satisfaction we have felt at the words of friend-
ship and esteem for our country which have been pronounced
here. The Italian people will certainly welcome with grati-
tude and delight the demonstrations of sympathy and goodwill
of this Assembly, which includes the most distinguished
statesmen and diplomatists.

" Permit me also to say, Gentlemen, that your thanks
are due not so much to the Italian Delegation as to the Italian
people. The spirit which has prevailed here has been the
spirit of the Italian people, of which spirit we Delegates have
been only the modest interpreters, a spirit of liberty, of demo-
cracy, and of wide tolerance for all ideas and all opinions.
This tolerance was necessary to produce the right atmosphere
for an assembly which was charged with the task of discussing
the most weighty political problems, and in which opposing
tendencies were bound to come into sharp collision.

" At a previous plenary sitting, we approved the conclu-
sions of the Financial Commission and the Transport Com-
mission. To-day, you have given the sanction of your votes
to the proposals of the Economic Commission, which
has submitted to you a series of resolutions of undoubted
importance.

" If we consider as a whole the labours of the technical
Commissions, we cannot fail to recognize the remarkable
value of the results obtained by the Conference in a short
space of time. Many questions of principle in the economic
and financial sphere have been dealt with and solved, and
important lines of action have been traced for the financial
reform of the nations of Europe, and for facilitating the
resumption of trade and of economic relations between them.

" Nevertheless, to speak frankly, all these theoretical con-
clusions would remain merely general affirmations, if certain

The Final " Plenary" 287

fundamental problems of European life were not first solved,
and if the general conditions for the return of the economic
organism of Europe to a more regular functioning were not
first created.

" We have applied ourselves with the greatest earnestness
to the solution of one of these fundamental problems, the
return of Russia to its place in the economic life of Europe,
but the time assigned for the labours of the Conference
has been too short to arrive at a definitive solution of the
problem. This is not to say that the Conference has failed
in its task, or that our work has been barren or useless. Far
from it. We have clearly and definitely stated the terms
of the problem, and we have discussed its fundamental aspects.
We have found certain points of agreement between our ideas
and those of the representatives of Russia, and have defined
the points of disagreement which still divide us.

" It is true that the fact that the participation in the Con-
ference of many responsible statesmen of various countries
would not allow of the indefinite prolongation of our labours,
has prevented us from reaching a final agreement. But,
most important of all, we have not lost confidence in the ulti-
mate success of our efforts ; we have decided to continue the
negotiations which have been in progress here for some weeks,
until a complete and satisfactory solution is obtained.

" The work to be accomplished at The Hague will be only
the continuation, the offspring, of the effort accomplished
here in Genoa. If the labours of the Commissions at The
Hague succeed, as we are fully confident that they will, in
overcoming the difficulties which still remain, the merit of the
final result must be ascribed to Genoa. It will be Genoa
that will have opened the way to European reconstruction.

;< This fact is for us a reason for gratification and profound
satisfaction. Genoa, though it may not have succeeded in
accomplishing all that we had hoped and desired, has opened
the way to a new European policy.

" This new European policy was affirmed in the very con-
stitution of the Conference, with the concurrence of all the

288 The Genoa Conference

States, which yesterday were still profoundly divided by the
memories of the war. It has been a source of pride to Italy
to have worked energetically and loyally day after day for
the maintenance of the original character of the Conference.
We believe that, in spite of serious difficulties, we have suc-
ceeded in our purpose ; that we have in fact tempered inevit-
able antagonisms in an atmosphere of mutual toleration,
and have contributed to a not inconsiderable advance in the
work of European pacification.

" A long road is still to be travelled, but we believe that,
apart from the immediate tangible results obtained at Genoa,
the spiritual and political work of the Conference will find its
inevitable continuation in the future developments of inter-
national life. The character of universality and European
pacification which we have earnestly desired for the Genoa
Conference, must be the character of the European policy of
to-morrow. In the pact of non-aggression, though it be only
provisional and temporary, a word of peace has gone forth
from Genoa, a word of peace which is a symbol, which ex-
presses the most ardent aspiration of our hearts, and which
will not be unheard by the peoples of Europe.

" On behalf of the King, Government and people of Italy,
I bid a hearty farewell to all the Delegations present, thank-
ing them for their unwearied efforts and for the valuable work
they have accomplished, and express the most cordial wishes
for the prosperous future of all the nations assembled here."

The meeting terminated at i p.m.

CHAPTER XVI

THE HARVEST

TO estimate the results of the Genoa Conference one must
in fairness consider what was effected at The Hague,
where the labours in the Italian city were resumed. " The
work to be accomplished at The Hague," said M. Facta, in his
farewell speech to the delegates, " will be only the continua-
tion, the offspring of the effort accomplished here in Genoa.
If the labours of the Commissions at The Hague succeed in
overcoming the difficulties which still remain, the merit of the
final result must be ascribed to Genoa. It will be Genoa that
will have opened the way to European reconstruction." But,
apart from the results to be harvested in the Netherlands, the
achievement at Genoa was of a high value and character. It
is only an unimaginative soul that gauges the effects of an event
like this by means of the scales and the table of avoirdupois.
The imponderabilia in a case of this kind are apt to be more
important than the tangible and material products, though
they are harder to appreciate and assess.

But, judged even by the more obvious standard, Genoa was
far from unproductive. The Pact of Peace, though, as already
remarked, not so permanent or ambitious a convention as had
been intended, was yet of great value. It ensured peace for
eight months along those debatable Eastern marches whereon
any day the heather might have been fired in an extensive and
devastating conflagration. It was all important that some
such interval should be secured in which suspicions and
hostilities might subside and perhaps permanent frontiers
be delimited by mutual agreements. There is, indeed, good
hope that the bud which germinated at Genoa will blossom

289 19

290 The Genoa Conference

into the full white flower of assured world-peace. That alone
will entitle the Conference to mindful honour and gratitude.

Then, again, the Reports of the three Commissions, Finan-
cial, Economic and Transport, are very real and positive
contributions to the rebuilding of the world. Some may object
that similar resolutions were carried at other post-war con-
ferences, such as those of Brussels and Barcelona, and
amounted to little in the end. But, as Sir Laming Worthing-
ton-Evans pointed out in the House of Commons, there was a
great difference between Brussels and Genoa. The former
conference consisted only of specialists or experts, practically
the same as afterwards appeared at Genoa. At Genoa, on the
other hand, Premiers and other responsible Ministers were
present, with more or less stable majorities behind them in
their respective States. These statesmen not only gave their
assent to the Reports of the Sub-Commissions but pledged
themselves to carry out in practical policy, so far as possible,
the recommendations contained therein. Excellent spade-
work was done at Brussels and elsewhere, but Genoa had the
advantage of being able actually to advise and secure execu-
tive action.

Such action has, indeed, already been taken in certain
departments. With regard to currencies and exchanges, the
Conference asked the Bank of England to call a meeting of
central banks, so that these might consider what steps were
necessary to bring about an International Money Con-
vention which will bind the States which become parties to it.
It was understood that the Bank of England would call such
a meeting of central banks and that the Federal Reserve Bank
of America might take part in the conference. So with regard
to transport. Much good pioneering work was done at
Barcelona, but Genoa took up the proposals and carried them
far on the road to actuality. For example, a conference was
to be called by the French Railway Administration of all the
big railway administrations in Europe to establish that
through traffic which is so greatly desired.

Genoa could get things done because the delegates were not

The Harvest 291

simply talkers and advisers but had their hands on the execu-
tive and administrative levers in their various countries.
These Reports, therefore, were not simply able speculative
treatises, to be neatly bound, docketed, filed — and forgotten —
but positive programmes of what their responsible authors
intended as far as possible to carry out. As such they may
contribute incalculably to the general work of economic
revival and reconstruction.

But, maybe, the deepest and most enduring results of the
Genoa Conference were just those of which no inventory can
be made. " The mere meeting of that Conference," said the
War Minister, " was good in itself." No one who has any
faith in human nature can believe that the representatives of
thirty-four nations could for six weeks take counsel together,
formally and informally, and join in festive and social gather-
ings of all sorts, without some benign psychological effects.

I have alluded to the striking and amusing resemblances in
some details between this international conference in the
twentieth century and the (Ecumenical Council of Nicasa in the
fourth. It is true Nicaea had to do with creeds, but so also
in a high degree had Genoa. The economic creeds of Russia
and England were at least as well defined and antagonistic as
the differences between the followers of Arms and Athanasius.
Dean Stanley, having described some of the worser features
of this early Christian Council, continues thus : " But we must
not forget the good as well as the evil which the Councils shared
with all large assemblies of fallible men everywhere ; namely,
the unconscious moderation which springs up from bringing
two parties face to face with each other. No doubt violent
and extreme partisans are often exasperated against one
another by personal contact and conflict. But the vast mass
of intervening shades of opinion is by such meetings drawn
more closely together. Probably no Council has separated
without making some friends who were before enemies, and
some friends closer than before."*

Such in general must have been the tendencies at Genoa.

* " History of the Eastern Church," p. 73.

292 The Genoa Conference

Mr. Lloyd George was surely justified in his unshakable
determination that this Conference should be a new departure,
and that for the first time since the war the nations should meet
not as conquerors and conquered, not as judges and criminals,
but on equal terms to discuss world-problems in which all had
a common interest. Mr. Lloyd George maintained this es-
sential character of the Conference in spite of all narrower and
darker influences, and his wisdom and insight will prove in the
ultimate reckoning to have been fully vindicated. There is
no doubt that much ignorance was illumined, many suspicions
and hostilities removed, and the desire for peace greatly fortified
and extended by the confabulations and love-feasts of Genoa.

Moreover, the various and complicated problems were
brought much nearer solution, if only by the ascertainment of
all the facts and factors pertaining to them. I have elsewhere
quoted Bacon's wise saying, "prudens quaestio dimidium
responsionis." A question intelligently asked is already half
way to its answer. The Genoa Conference helped immensely
to the clearer understanding of the problems which Europe
and the world inherited from the war.

Genoa let the air and sunlight into many dark places of
the earth and brought to the surface and dissipated thence
many dangerous humours of all kinds that were festering below
and must have ended in renewed death and desolation. The
whole of Europe thinks and feels more healthfully as the result
of this prolonged communion in the Italian city. Genoa
has infinitely widened the horizons of many States who before
were inclined to concentrate on purely selfish and particularist
ends. I saw most of the aspects of the Conference life and I
think it would be difficult to exaggerate its educative and
atoning influences.

Dean Stanley remarks that the old Christian synods always
made " some friends closer than before." This happened at
Genoa between England and Italy. The Governments had
been friendly before, but this Conference will have marked the
development of a real liking and respect between the Italian
and British peoples. In the course of the narrative we have

The Harvest 298

seen how the British and Italians walked hand in hand along
all the paths of policy and how strongly British liberal ideas
were supported by practical Italian sympathy. Speaking
at the luncheon given by members of the British Press to their
American and Italian colleagues after the last plenary session,
Mr. Lloyd George said :

" The last few years have been notable for the great and
growing increase in comradeship and co-operation between
the Italian and British democracies. It has grown in the
frequency of occasions when they have worked together ; it
has grown in intensity. What is the cause of this ? It is
partly undoubtedly due to old traditional sympathies.
You in Italy forget, and we in England often forget, that
both France and Great Britain were once Italian pro-
vinces, and that we owe to you our civilization and our
Christianity.

" But our association is more recent and fresher than
that. The Italian struggle for liberty and unity made a
deeper impression on the hearts of Englishmen and Scotch-
men and Welshmen than any struggle for liberty during
modern times. But it is not merely the historical bonds
of sympathy ; it is something which is binding at this
moment and will endure. Our aims are common, our
aspirations are common, and our interests are common.
A sti ng and prosperous Italy is in the British interests.
Just you ponder on this. You are an ingenious, enter-
prising, and rapidly growing people, and Great Britain
sympathizes in every sense of the word with all the natural
and legitimate aspirations of the Italian people for outlets
for their trade and commerce, their energies and their
population, and we realize especially that their need i3
for raw material, and Great Britain is prepared to extend
every facility in its power for supplying those needs.

" We worked together in the past. We mean to work
together in the future, for if there is one interest which
Italy has which Great Britain has also it is the interest of
the peace of the world. We fought our fight, and a

294 The Genoa Conference

terrible fight it was. Your contribution was a great one.
Peace is now our common interest. We have laid the
foundations : more than that, we have erected some of
the pillars, and you will find that when the structure is
complete you will be amazed at how much is due to the
Genoa Conference. I congratulate the Italian Govern-
ment upon the success which has been achieved.

" I would like to express on behalf of Great Britain my
gratitude to them for what they have done, and also to
express the hope that these great democracies and the
democracy of the West — the great democracy of the West
— will arrive at an understanding. They came to our aid
once at a dark and trying moment. I am still looking
forward to seeing them coming over the horizon. I
believe they will come, and the great democracies, working
together, will complete the temple of peace, the greatness
of which all humanity will worship."

Signer Facta, speaking after the British Premier on this
occasion, favoured a " closer union between the Italian and
British peoples, something tangible, something that would
be great for the future development of both nations."

On his return to England Mr. Lloyd George gave an account
of his stewardship at Genoa on May 25th in the House of
Commons. After some words of general introduction he said :

" We had at Genoa assembled probably the largest
gathering of nations that has ever met in the history of
this world. We had, I think, thirty-four nations repre-
sented around those tables ; represented in the main
by some of their leading Ministers. They were there to
discuss the restoration of Europe to normal conditions
and the restoration of peaceful relations amongst them-
selves. There were nations there at that table hardly
on speaking terms with each other. There had been
feuds and misunderstandings between them, prolonged
up to the very hour of the Conference. We met in perfect
calm, in perfect harmony. We discussed not all the

The Harvest 295

questions which were in dispute between these nations,
because many of them had already been referred to other
tribunals, including the League of Nations. But we
discussed many of them, and we all discussed these matters
in a spirit of perfect amity right to the very last hour of
the Conference. I feel that, had a Conference of that
kind assembled in 1914, the world would have been
spared a very bitter experience and a very tragic piece
of history.

" We had to discuss questions there of which I had
already given a summary to the House of Commons
just a week before we went there. The main purpose
of the Conference I think I summarized quite fairly —
the restoration of financial and trading relations, the
improvement of the diplomatic relations, the removal
of certain disputes which were endangering the peace of
nations. Did we succeed ? My answer will be that I
will simply state the facts and let hon. members judge
for themselves upon those facts. I will state them
fairly ; I only ask that hon. members should judge
them fairly.

" The attainment of normal conditions in Europe was
impeded by numerous obstacles, and the removal of these
obstacles constituted the aim of the Genoa Conference.
What were these obstacles ? They were (i) the currency
difficulty and the instability of the exchanges ; (2) cus-
toms and trading restrictions ; (3) transport difficulties ;
and (4) the absence of a sense of security against war.
There were four Commissions set up for the purpose of
reporting upon four different branches of the phases of
the problems upon which we were engaged.

" There was, first of all, the Financial Commission,
which was presided over with very great ability by my
right hon. friend the Chancellor of the Exchequer (Sir
R. Home), who fortunately was able to conclude the
labours of that Commission before he left. There were
the Economic Commission, the Transport Commission,

298 The Genoa Conference

and the Political Commission. On these Commissions
my right hon. friend the Secretary of State for War (Sir
L. Worthington-Evans) and my hon. friend the Secretary
for the Overseas Trade Department (Sir P. Lloyd-Greame)
appeared on behalf of this country, and they rendered,
as anyone who knows their capacity can be assured, the
most admirable assistance. I had better say a few words
of the work of the Financial Commission, the Transport
Commission, and the Economic Commission before I
come to the work of the Political Commission, around
which most of the controversy ranged and which excited
most interest at the Conference and, I rather think,
outside as well.

" The Financial Commission made an attempt to re-
establish currency and to improve the stability of the
exchanges. The Commission not only defined the con-
ditions under which the currency and exchange problems
of Europe can be solved, but it also indicated the precise
steps to be taken, and arranged for the initiation of
reforms at a meeting of central banks. The resolution
aimed at removing currency difficulties, and it began
with a currency code. The object of this code is to
anchor paper currencies again, directly or indirectly, to
gold and secure for the nation a credit policy in order to
prevent fluctuations. With regard to exchanges the
primary recommendation is that the artificial control
of exchange operations should be removed in order that
nothing should stand in the way of the recovery of ex-
changes as currencies recover and as the exports which
support them improve. Trade was checked and impeded,
we found, by the absence of credit. A very fruitful
suggestion was made in the organization of an international
corporation, which will be explained by my right hon.
friend the Secretary of State for War. A good deal of
labour has been expended by him upon the organization
of that invaluable body, and assistance has been rendered
in its formation by some of the leading financial countries

The Harvest 297

of the world. Restrictions, impediments, unfair con-
ditions in the way of trade were to be found everywhere.
It is one of the unfortunate results of the war — of a war
which demonstrated the power of international good
will almost more than any other event in the history of
the world — that it should have ended in an abnormal
development of a narrow, selfish, and blind nationalism.
You found it in every direction. In the customs, in
restrictions upon trade, in restrictions upon transport,
transport organized in order to develop international trade
used for the purpose of preventing international trade.
It is not merely the amount of the tariff, but the fluctua-
tions of the tariff, the uncertainty of the tariffs ; human
ingenuity exhausts itself in order to make trade between
nations as difficult as possible. That is the condition
which we found on the Continent of Europe, and I am very
hopeful that the reports of the various Commissions,
upon which most of these nations were represented and
collaborated, will have the effect of producing a great
improvement in some of these unfortunate positions.

" Although peace has been established in Europe,
it is quite clear that the war atmosphere to a certain
extent remains. There is a good deal that I should like
to say about that, but for the moment I shall postpone
it. There was commercial war, transport war, customs
war, diplomatic war, propagandist war, war of armaments,
and even war of the marching and counter-marching of
armies. An hon. member opposite, by a question which
he put, seems to think that that has no foundation in
fact. I wish it had not. As a matter of fact, during the
time that the Conference was sitting there were troops
marching towards the frontiers in very considerable num-
bers. There was clearly in Europe an atmosphere of
international suspicion and pending conflict.

" The problem which naturally occupied most of the
attention of the delegations, and the one which excited
most controversy, was the problem of Russia. I should

298 The Genoa Conference

like to tell the Committee how the problem presented
itself to us there, and I think it is essential that I should
state the facts without reference to their particular bearings
upon any conclusions which either members or myself
draw from them. Some may draw one set of conclusions,
and others may draw a different set of conclusions. My
business is to state the facts as they appeared to us at
Genoa, and I shall do so quite frankly and quite fearlessly,
because, unless we get to the realities of the European
situation, we shall never clear up that situation. There
sat around that table the representatives of thirty-four
nations. Over there sat the Russian delegation, repre-
senting more human poverty, wretchedness, desolation,
hunger, pestilence, horror, and despair than all the other
nations represented round that table. That is the first
fact to realize. The other fact was this, that without the
assistance of the other thirty nations it was hopeless for
Russia, whatever its Government, to extricate itself
from that pit of squalid misery. The Russian people, a
gallant people, a loyal people, a patient people, a people
capable of greater heights of unselfish devotion than
almost any race in the world, as they demonstrated during
the first two or three years of the Great War, when,
more particularly on one occasion, they sacrificed them-
selves in order to save the Allies, but also a people accus-
tomed for generations to obey ruthless and relentless
autocracy and a people who, under the lash of despair,
could be very formidable to their neighbours.

" There — it was no use questioning it — sat the men who
represent the unchallenged masters, for the time being,
of the fate of that formidable, but very distressed, people.
The millions of Russia could only be dealt with through
them. They could only be brought into contact with
the outside world through them. They could only be
rescued from hunger and death through them. The
treasures of Russia could not be unlocked to the outside
\vorld except through them. Peace or war with Russia

The Harvest 299

could only be made through them, and whether Russia
marched forward or retired, whether the 1,500,000 men
she has under arms to-day marched, and whether the
4,000,000 men she has in the background, in reserve,
would march to-morrow, is a question of whether they
obey them or not. That was the first fact that you had
to get well into your mind before you began with the
business of Russia.

" There were three alternatives in dealing with the
situation with which we were all confronted. It was
not a question of which of the three we would prefer.
It was a question of which of the three was possible.
There was, first of all, the course, which had been tried
before and had failed, of using force. That no one
suggested at Genoa, whatever their hostility to the present
Government. The other was to leave Russia to her fate
until she had a more benevolent and acceptable demeanour.
The third, which I described to the House the last time
as the Pitt policy, the policy of Mr. Pitt, the policy
that abhorrence of the principles and conduct of a Govern-
ment should not preclude relations with it which would
enable you to deal with the people under its sway. With
regard to the first, I dismiss it. No one discussed it,
no one suggested it.

" I come to the second alternative which we have
in our mind, and which we may be driven to adopt,
and that is that you should leave Russia alone to her fate.
No one put it forward at Genoa, and if I examine it now
it is because it is the only possibility left. But I want
the House of Commons and the country to realize what
it means after the facts which came to our knowledge
at Genoa. If you leave Russia to its fate, assuming this
Government goes, what next ? It is either a question
of a more extreme Communist organization or the possi-
bility of a militarist organization. Would a hungry
Russia sit quietly whilst her children are dying ? That
is not the experience of the past. Is anyone ready to

800 The Genoa Conference

insure the peace of Europe whilst that policy is maturing ?
There has been a very great development of insurance
recently in this country, but I should like to see a journal
which would insure Europe against the risks of that
policy for a single year.

" Now I come to a flash of light which the Conference
itself cast upon the sinister possibilities of leaving this
question alone. I am referring to the Russo-German
Agreement. I am not going to discuss it on its merits.
I think it was a great error in judgment ; but what I
have to say on that subject I have already said, and I
do not think it necessary to repeat it. It was a mistake
undoubtedly for Germany, but that is not the aspect
of it which I want to bring to the notice of the House
of Commons. I am not going to dwell upon the silly
forgeries of military conventions, which take no one in.
It is not necessary. The effect of that agreement is in
itself a portent. Consider for a moment what it means.
Here you have two of the greatest nations in the world,
whether you regard territory, population, or potential
power and resource, both out of favour, each having done
something which has discredited it with the other nations
of the world — not quite received into the full society
of nations, peace signed, a nominal equality, but there
was the sense of the superior nations and the inferior
nations, the nations that sat above the salt and the
nations that sat beneath it. These are the fundamental
facts. There may be good reasons in both cases. It
is the sort of society treatment of persons who behave
discreditably. You felt that in the Conference, and
they felt it together. There was a community of
misfortune. There was a community of debasement.
There was a community of what they regarded as mala
fides. There was a difficulty as to getting them on to
Commissions. Pariahs are more gregarious than paragons.
The latter have a sense that they do not require society ;
but those on whom discredit falls want society and

The Harvest 301

friendship. This may ripen into a fierce friendship. What
does that mean ?

" I want the House thoroughly to understand the
possibilities of it. Germany is disarmed, and if necessary
you could disarm her still more. I will not say you
could take every gun away — you find that difficulty in
Ireland — but you could take most. You could render
her perfectly impotent ; but there is one thing you
cannot do, and that is to prevent the rearming of Russia
if the nations are driven to despair. Germany cannot
re-equip Russia economically. She has not the capital.
You need the West. That is not the case with armaments,
where you have every natural resource in one country
and every technical skill in the other. It is necessary
that we should look at all the possibilities of the situation,
and it is my sincere hope that no occasion will ever arise
which will make it necessary to go back and refer to the
warning which I uttered as to the danger of the possibilities
of that situation. The average man cannot be excited to
hope or fear by the possibility of something happening
years hence. It is the business of statesmen to look ahead.
That is why I am appealing to the House of Commons,
which has responsibility on behalf of a great nation
and a great Empire — a responsibility not merely for that
Empire, but a responsibility which extends to the whole
of Europe — to think as to the dangers lurking in this
situation and to provide against them.

" The British Empire Delegation met together to
consult upon the whole of these facts, and I must say
one word about that. We had the representatives of
Canada, Australia, Africa, New Zealand and India. They
came into our consultations. There was not a step of any
kind taken without previous consultation with them, and
the action we took had their unanimous support and was
arrived at after the guidance which they gave us. They
came to the same conclusions that we did, that it was
necessary, in the interests of the peace of the world,

302 The Genoa Conference

whatever we thought about the Soviet Government —
and let me say at once we had no difference of opinion
about that — but it is not my business to tell the House
of Commons what that view was. It is the Government
of another country. If it had been the Government of
this country, I know what would have been said. But
they came to the same conclusion as we did, that in the
interests of the peace of the world, some arrangement
with Russia was necessary in order to save the misery in
Russia itself, necessary in order to enable Russia to make
her contribution to the needs of the world, necessary to
enable Russia to help in the swelling of that volume of
trade upon which so many millions of people depend for
their daily bread, necessary in order to give a sense
of stability, necessary above all in order to avert those
evils which lurk in the future if nothing is done in order
to unravel this tangle of misunderstanding. For that
reason the British Empire Delegation, all of us, gave the
whole of our strength and our minds day after day to
fight the battle of the peace of the world.

" Now I come to the practical difficulty we experienced
in dealing with the Russian problem. Russia needed
goods and customers for her produce in the future. We
needed produce and customers for the goods that Russia
needed for her development. It seemed very simple.
There was her need ; here was our supply. Therefore it
seemed perfectly simple. There was a seller and there
was a buyer ; and yet when you came to deal with it,
you found a chasm, deep, wide, impassable, between the
man who needed this and the man who could supply it,
and the man on the other hand who needed that and
the man on the other side who could supply it, a chasm
rent by the revolution between the old and the new.
The first question was, ' Could that chasm be filled ? '
We said, ' Not for a generation.' The next question is —
' Can it be bridged ? ' That was our problem, and a
great engineering problem, because you had to find

The Harvest 303

foundations for the piers of your bridge in a shallow and
shifting channel of mud and quicksands. Without
that bridge there is no intercourse between those
120,000,000 of brave, gallant, hardworking people, who
are in misery, and Europe, which needs them and is ready
to help them.

" How did this difficulty arise, or, rather, what concrete
form did it take ? Revolutions on a great scale always
carry in their train confiscation of property, and, I am
sorry to say, confiscation without compensation. It
was our experience in England. We had a religious
revolution which was a source of so many calamities.
There was the French Revolution, which was accompanied
by a wholesale confiscation of the land of France without
compensation. In fact, the conservatism of France
to-day is rooted in confiscation. In addition to that,
there is another feature of revolution, and that is the
repudiation of pre-revolutionary obligations. France
created a system of peasant proprietorship without com-
pensation, but she did not, at the time, seek credits from
the world. Russia with her confiscation, Russia with
her repudiation, is coming to the very people whose claim
she refuses to pay, and whose property she has confiscated,
and she says, ' Lend me more.' They can only get it
on the conditions which have been laid down — the
restoration of the confidence upon which credit is based.
The Russian leaders quite realize this. Whatever else
they may be they are men of exceptional ability, and they
are men with a knowledge of the outside world. However
much they communicate that knowledge to their followers,
they certainly know it for themselves. They know that
they are not going to get credit from the West upon the
basis of confiscation and repudiation of debt. They also
know that Russia can never be restored until she gets
credit.

' We had at the beginning of the Conference a close
examination of the problem in a two-days' conversation.

304 The Genoa Conference

Representatives of France, Belgium, Italy, and my
right hon. friend, the Secretary of State for War, and
myself had frank and very searching conversations with
the leaders of Soviet Russia. They said : ' The revolu-
tion is a break with the past, a break with the methods
of the past, with the traditions of the past, with the
obligations of the past, but we quite realize that Russia
cannot be restored economically without the help of
systems which are different from our own and systems
with which we are at war.' As they put it — The Capitalist
system. They said : ' We also know that we cannot
get the help of the capitalistic system except upon con-
ditions, and, although we do not abandon any of our
principles, we realize that we cannot get the assistance
required unless we make terms with the capitalists.'
That, roughly, is the position they took up. With
regard to debts, money which had been advanced to
Russia before the revolution, they were prepared to
acknowledge them, and to make arrangements for repay-
ment. What they said was this : ' To ask us now to pay '
— I forget what the amount is, but it is a very considerable
sum — ' or even to pay the interest upon it, is to ask us
for something that it would be quite impossible either
for us or for anybody to pay. We should be entering into
an obligation which we could not discharge, and until
Russia is restored economically we can pay nothing.'
That is quite true. ' Therefore/ they said, ' the obligations
which we enter into will depend upon the assistance which
you give us.'

' This country has been in the habit of dealing in the
past with defaulting States, and it has always been a
condition, whenever a defaulting State comes for further
credits, that they should acknowledge their old debts.
There has always been a wiping-out of past interests,
a postponement of interests in the future, and sometimes
a writing-down of the capital amount as a condition of
further assistance. That was the proposition they made

Dr. Beaos, Foreign Minister Czecho-Slovakia. Chief Czecho-Slovakian Delegate.

\_T<< far* )>age 304.

The Harvest 305

there. They said, ' Before we can tell you what mora-
torium we should require, and how we can repay, we must
know, first of all, what you are prepared to do in order
to put Russia on a sound economic basis by helping her
with credits.' There was a basis there for a business
discussion. There was no challenge of principle at all.
It was purely a business discussion. The first challenge
of principle came in regard to the claims put forward
by the Soviet Government for compensation for ruin
wrought in the civil war. They said, ' Most of the smash-
ing of property in Russia was done by you/ I am putting
simply the proposition which they submitted. They said
that the damage was done by Deniken's, Koltchak's and
Wrangel's intervention, and they put forward a claim.
The House will get a copy of that claim by and by. It is
a very interesting document. It is for a trifling
£5,000,000,000, which is said to have been the damage
done in these various operations. We had to tell them :
' We cannot acknowledge that under any circumstances.'
Historically it is an unsound proposition. In past
revolutions assistance has been given by other countries
to one or other of the parties. Assistance was given by
France to the Royalist Party in our Civil War, and un-
doubtedly that assistance kept the thing going much
longer than would otherwise have been the case. There-
fore there might have been a bill for reparations against
France. Instead of that, I think Cromwell made friends
with France as soon as he could get the opportunity.
On the other hand, we gave every assistance to the anti-
Revolutionary Party in France, and I have never heard
of France putting in a bill for reparations against the
British Ministry of that date.

" The Russian claim in this respect was one that we
could not acknowledge. We were prepared to take into
account the fact that Russia was damaged by the civil
war, because that is a question which a creditor is not
merely entitled to take into account, but is bound to take

20

306 The Genoa Conference

into account when he is considering what payment he
can expect from a debtor. No doubt hon. members
have seen the document of April I5th. It is a very im-
portant document, because it represents the first approach
between the two parties. First of all we said that we
could not accept any liability with respect to compensa-
tion, but that we were willing, in view of the serious
economic condition of Russia, to write down the claims
for money advanced by Governments during the war.
That was agreed to by France, Belgium, Italy and our-
selves. But we could not accept any claim to be put
against the money advanced by any nationals, by any
individuals, to Russia, or to acknowledge any counter-
claim to be put in its place in regard to damage done
to property in Russia, or to property which was with-
drawn from Russia. That was the proposition we put
forward. There was a letter from the Russian Delega-
tion which was not wholly satisfactory, but the Powers
came to the conclusion that it was good enough for us to
go on with the discussion.

" As I have already stated, when you come to the
question of debts, of loans to Russia in the past, there
is no insuperable question of principle which divides the
parties. But when you come to property, the division
was a much more serious one. I hope the members of
the House have got the Cannes Resolutions. The posi-
tion of the European Powers is very clearly stated in
those resolutions, and that statement of the case of
Europe against the Soviet Government was never assailed
by the Russians during the whole proceedings. They
accepted the Cannes Resolutions.

" The first resolution acknowledges the sovereign right
of a State to do what it likes within its own territory with
property. That was done in Czecho-Slovakia and
Rumania. Property was transferred there with a mini-
mum of compensation. We had had complaints from
our nationals. We have never been able to interfere

The Harvest 307

because the sovereign rights of these communities were
involved. But in Section 3 we say that although a
country has a right to do what it chooses with property
inside its own jurisdiction, still if it is seeking credits
from the rest of the world it must either restore property
or give compensation. That presented difficulties of
principle. The Powers were in complete agreement
upon this. I will tell you where there was a slight dis-
agreement because a great deal has been made out of it.
Our claim in respect of property was framed in the first
instance by three of the ablest jurists in Europe. One
was M. Fromageot, a French jurist, another, Sir Cecil
Hurst, and the other, representing Belgium, a great
banker, who is also a most able jurist. Those were the
three men who drafted what became known as Clause 7
in respect of property, and the British Empire Delegation
accepted their draft. It came before the Political Com-
mission. I want the House of Commons to get these
facts. The delegates of France accepted that draft,
which was just as much theirs as ours, with the addition
of one amendment, which we thought was an improve-
ment, and accepted. There was therefore no difference
of opinion between France and ourselves upon the
property clause which is embodied in our Memorandum.
" Belgium took a different view. The Belgian jurist
had helped to draft the clause. The Belgian representa-
tive in the Conference refused to accept it. His view
was, the view of the Cannes Resolution was : Restoration
or compensation, which is the principle of every civilized
Government. If a Government takes land or property
away here it must compensate ; it has the full right to
do it. The Belgian position was that the property must
be restored if it were materially possible. That is not
the Cannes Resolution. That was the only difference.
France acted with Belgium afterwards, not from a griev-
ance, because they had already accepted the draft, but
rather out of general sympathy with Belgium ; but the

20*

308 The Genoa Conference

whole of the Conference accepted the draft which was
prepared by the British, French and Belgian jurists.
I thought it necessary to explain that to the House.
Fortunately nothing arises out of it, because the Russian
Delegation did not accept that document. They put
forward a document which is known as the document of
May nth. There they went back a little upon their
previous decision. In order to realize why they did so,
it is necessary to state one or two facts, because the
House cannot judge the Russian situation without under-
standing what that means.

" Between the date of the Villa d'Albertis conversations
and May nth the ist of May intervened. Hon. gentle-
men opposite know what that means. It is not very
easy to negotiate immediately after the ist of May, and
the same thing happened in Russia. There is no doubt
that there has been a great struggle there between the
practical statesmen of the Soviet system and the extreme
theorists. For some time the more moderate and prac-
tical men were on top. Then came the struggle of the
ist of May. There were great demonstrations in Russia,
great demands that there should be no surrender, and
that was undoubtedly reflected in the action of the Soviet
Delegation. It is a great mistake to imagine that auto-
cratic Governments are altogether free from the influence
of public opinion, and there is only one public opinion in
Russia, not the public opinion of the vast masses of the
people. Ninety-five per cent, of the people are indifferent
to this system or hostile to it.

" The only opinion there that matters is the opinion
of the workmen in the towns, who represent less than one
per cent, of the whole population. But the Soviet system
and its power is based upon them. It is not a democracy.
It is an oligarchy, and this talk about nationalization
in Russia is all humbug. They talk about the great prin-
ciples of the Revolution. Ninety-five per cent, of the
property in Russia is land. Nominally they have

The Harvest 309

nationalized it ; let them try to take it back. It is as
much a peasant proprietary as if the title had been
written out, and they know that. I told them so, and
they could not challenge it. And they say : We cannot
give up the great, sacred principles of the Revolution.
The fact is that the vast majority of the Russian people
are more individualist than the people of this country,
and you have that paradox of a Communist Government
speaking in the name of an individualist population,
where Communism is known as export beer. It was
not really in Russia itself. In the towns you have got it,
but you get it much less and less in the towns than it was
before.

" Therefore the difficulty is not a difficulty in practice ;
it is a difficulty in principle. You have got theorists
there intervening whenever business is discussed. They
write documents asking for credits, most of which is
taken up with a defence of the doctrine of repudiation.
Many among them realize what a foolish document the
document of May nth was. It was so foolish a document,
that it could only have been written by a very clever man.
If they want credits they must get them where credits
are. Suppose they come to float a loan in England and
hold a meeting in the Cannon Street Hotel, and M.
Tchitcherin delivers an eloquent exposition of the doc-
trines of the Revolution by way of commending the loan,
and says the basis of all revolutionary principles is the
repudiation of debts and the confiscation of property.
I have no doubt that he would illustrate it with a wealth
of historical allusion, which only he himself could com-
mand, but that the more powerful the argument the less
he would convince, and at the end of it he might have a
vote of thanks proposed by my hon. friend opposite
(Lieut .-Commander Kenworthy), seconded by Mr. George
Lansbury, and that resolution of thanks is the only thing
that he would take home in his pocket.

" These theorists cannot realize the difference between a

310 The Genoa Conference

logical proposition and a business one. There is all the
difference in the world. Men in business know. There-
fore they have got to realize that they will not get credit
for their business until they command the confidence of
the only people who are in a position to give them credits.
I should like to ask how many trade unions would have
invested their funds on the strength of that document.
Up to the time they wrote that document the Russians
were discussing business. We had a basis for a business
discussion as to amount, moratorium and bonds. Then
came May ist, and they nailed their flag to that barren
fig-tree of Communism, under which multitudes are
dying of pestilence. But they were themselves anxious
to get away as far as possible from that atmosphere
and to come to a discussion of the practical difficulties.
This is what I was informed — and we were all informed
— that it was easier to settle these matters in practice
than in principle. If you say to them, ' You must
accept this principle,' they say, ' No, we cannot. That
is the sacred doctrine of the Revolution.' But if you
say to them, ' Well, now, what about that property ?
Will you restore it ? ' They say, ' Well, that is another
matter.' The Hague Conference is to proceed from a differ-
ent angle. The Cannes Resolutions are accepted as a basis.
Then you come to a practical discussion between experts
as to what they are prepared really to do. They state
that a vast majority of the properties — and most of our
difficulties came over property — can, as a matter of
fact, be restored. The real reason is, they do not know
what to do with them. They had not the skill ; they had
not the knowledge ; they had not the workmen ; and they
are most anxious to hand these over to anybody who
knows what to do with them. That is the fact of the
matter. Most of the properties, I understand, are in a
position to be restored, and are ready to be restored.

" Then comes the question what is to be done about
the rest. In regard to the rest of the properties they are

The Harvest 81 1

prepared to consider compensation in kind of one category
or another. I believe they have come nearly to the end
of their gold, and what they have is essential to keep the
population from starvation. Therefore, payment in
gold is something for which we cannot hope. You are
dealing with a bankrupt community. What they are
prepared to do is to discuss the giving of concessions.
Where there have been amalgamations by the State of
concerns like the Donetz coal mines, they are prepared
to give compensation in the form of shares in the larger
combines to the owners of any particular mines ; and
with regard to the small minority which I am sure will
be left, they are prepared to give bonds, which I do not
think anyone will regard with very much joy. It is a
country of infinite natural resources. These are matters
which the property owners will consider, and they will
do it with the full knowledge, because they are practical
men, that they are dealing with concerns which may
not for a great many years to come pay twenty shillings
in the pound.

" These are the things to be discussed at The Hague.
Meanwhile also, there will be the question of what credits
will be available. They need money for railways, for
ports, for machinery, for agricultural implements, for the
equipment of their factories and mines, and for the
clothing of their people, who are in rags. Those questions
will have to be considered very carefully at The Hague
in conjunction with the other propositions. I am very
hopeful that when we come down to an examination of
the practical details something may be achieved. Mean-
while, we are to consider what is to be done in order to
prevent conflicts in Europe. There was real danger.
The Red Army at the present moment is an army of
1,450,000 men under arms. On January ist of last
year they had 5,000,000 men under arms. Since January
ist the number of men on the frontiers has doubled,
according to the reports we have received here. The

312 The Genoa Conference

reports I received at Genoa were of an even more alarming
character. One day the Prime Minister of Rumania came
to me and said that a very considerable body of Red
troops — I believe he said seven infantry divisions and two
cavalry divisions — was massing on the Bessarabian
frontier. There has been a considerable increase in the
force on the Polish frontier, and I was told that when the
attention of M. Tchitcherin was called to it, and he was
asked, ' Why are you massing troops on my frontier ? ' the
reply of M. Tchitcherin was : ' Because you are massing
troops on my frontier.' The same thing applies to other
parts of the Russian Soviet territory.

" Whether the troops are there for attack or defence
does not altogether remove apprehension, because it is
the fears of nations that make conflicts. Russia may be
afraid of attack from Rumania or Poland, or Poland and
Rumania may be afraid of attack from Russia. These
fears make conflicts when troops begin to mass and to
increase and to march towards each other. That was the
position in Genoa. The first thing we had to do, if we
were to continue the Genoa examination, was to ensure
that the peace of Europe should be maintained during that
period. That is why we have the truce of peace, which
embodied a solemn declaration on the part of thirty-four
nations that they would be guilty of no act of aggression
against their neighbours during the period of these
examinations, nor would they be guilty of any act of
aggression against the institutions of each other during
that period. I hope that once the sense of security
which comes from a fact of that kind begins to take root
the fears which cause wars will be dispelled, and that it
will end in a real pact of peace.

" When The Hague Conference takes place it will
examine the propositions which are submitted to them. If
they make recommendations the Governments will take
a month to consider whether they will adopt them. If
they are favourable and acceptable, then I hope there

The Harvest 313

will be a peace which will be permanent. Boundary
questions will then be determined, and for the first time
you will have peace in Europe. There was nothing
more striking at the Genoa Conference than the deep,
passionate anxiety of the nations represented there to
have peace. Whenever there was anything which looked
like a rupture there was an anxiety to prevent it. It
is all very well for us here, hundreds of miles away from
these things, to feel thankful to have peace, with the sea
between us and any trouble. It is a different thing when
you look across a passable stream at a country with
1,500,000 revolutionaries under arms and a hungry
population behind them. It causes a sense of fear and
a sense of insecurity, because each of these countries is
a country which has actually seen the marchings of
armies within the last six or seven years.

" I am not going to say whether Genoa will ultimately
succeed. I believe it has accomplished great things
already. You have had thirty-four nations coming
together to discuss their troubles, their difficulties, their
disputes and their apprehensions, and making a real
effort to arrive at an understanding together, nations
which had not met before for years, nations which had
been in deadly conflict with each other. If Genoa were
to fail, the condition of Europe would indeed be tragic.
The channels of international trade would become hope-
lessly clogged by restrictions and difficulties, artificial and
otherwise. Commerce would stagnate in the poisonous
national swamps of insolvency. There would be quarrels,
suspicions and feuds between nations, ending who knows
where in great conflict. But if Genoa succeeds, even
partially, great things may be accomplished for the peace
of Europe. We have already captured positions from
which further advances may be made. We have been
working on the battlefields, and on the morrow we can
advance. We have established a truce of peace between
nations which had armies massing against each other and

314 The Genoa Conference

advancing towards each other. If we can go further
and make an arrangement by the good-will and co-opera-
tion of these great nations of Europe, the psychological
effect on trade will be immediate and incalculable. It
would be like the genial breath of spring on a Continent
which has been withered by a long and cruel winter.
Trade would burst into life and good-will amongst nations
would flourish. That is why the British Empire Delega-
tion are proud that they took a leading part in upholding
and fighting for the high ideals which will ever be asso-
ciated with the great Conference at Genoa."

After certain criticisms and a further reply by Mr. Lloyd
George, the House expressed its continued confidence in the
Prime Minister and the Government by a vote of 235 against
26. Such a decision would appear to express the general view
of the country about the Conference and about the great
statesman who proposed it, who defended it throughout against
its ill-wishers and secured in the end so large and beneficent
a measure of actual and prospective success.

APPENDIX I

The other Cannes Resolutions were as follows :

(b) Place and Date of Conference.

The Supreme Council agreed at its meeting held at
II a.m. on Friday, the I3th January, 1922, that the Genoa
Economic and Financial Conference should assemble on
the 8th March, 1922, subject to any later adjustment.

(c) Invitation to Russia.

The Supreme Council at its meeting held at 6.15 p.m.
on Tuesday, the loth January, 1922, agreed that an invita-
tion should be addressed to Russia in the following terms :
On behalf of the Supreme Council of the Allied Powers
I have the honour to transmit to you a copy of a resolu-
tion passed by the Allied Powers in conference at Cannes
on the 6th January, 1922.

In accordance with this resolution and with reference
to M. Tchitcherin's telegram, dated the 8th January, 1922,
I hereby formally invite delegates from Russia to attend
an Economic and Financial Conference to be opened at
Genoa early in March, 1922.

I shall be glad if you will inform me of the names of
your delegates and their staff, and on receipt of this
information and a statement of the route by which your
delegates propose to travel I shall communicate with the
interested Governments and inform you of the arrange-
ments made in order to afford them all necessary facilities
and safe conduct.

The Supreme Council, conscious that you recognize
the importance which it attaches to the assurances and
guarantees which it has laid down as indispensable to
the useful co-operation of the Allied Powers with Russia
in the task of the economic and financial reconstruction
of Europe, learns with satisfaction that you propose
to send representatives with full powers to take decisions.

315

816 The Genoa Conference

(d) Invitation to the United States of America,

At its meeting held at 3.30 p.m. on Friday, the 6th
January, 1922, the Supreme Council agreed that an invitation
to be represented at the Conference should be addressed
to the United States of America.

(e) Invitations to other Countries.

The following lists show the countries to be invited to
the Genoa Conference in accordance with the decision of
the Supreme Council taken at its meeting held at 6.15 p.m.
on Tuesday, the loth January, 1922 :

I. The following countries to be entitled to appoint
delegates without limit :

1. The Allied Powers represented at the Cannes
Conference.

2. United States of America.

3. Germany.

4. Russia.

II. The following countries to be entitled to appoint two
delegates each :

5. The various dominions of 14. Poland.

the British Empire. 15. Czecho-Slovakia.

6. Spain. 16. Latvia.

7. Portugal. 17. Austria.

8. Norway. 18. Hungary.

9. Sweden. 19. Rumania.

10. Denmark. 20. Jugo-Slavia.

11. Finland. 21. Greece.

12. Switzerland. 22. Bulgaria.

13. Esthonia. 23. Holland.

III. The following country to be entitled to appoint one
representative :

24. Luxemburg.

(f) Outline Agenda.

The following outline agenda was approved by the Supreme
Council :

i. Examination of the methods of putting into practice

Appendix I sir

the principles contained in the resolution reached at
Cannes on the 6th January, 1922.

2. The establishment of European peace on a firm basis.

3. Essential conditions for re-establishment of con-
fidence without injury to existing treaties.

4. Financial subjects.

(a) Currencies.

(b) Central banks and banks of issue.

(c) Public finance in relation to reconstruction.

(d) Exchanges.

(e) Organization of public and private credit.

5. Economic and commercial subjects.

(a) Facilities and guarantees for the import and export
of commercial products.

(b) Legal guarantees for the re-establishment of
commerce.

(c) Protection of industrial property and copyrights.

(d) Status of consuls.

(e) Admission and position of foreigners in regard to
the conduct of business.

(f) Technical assistance to industrial reconstruction.

6. Transport.

(g) Detailed Agenda and Resolutions.
The Supreme Council at its meeting held at n a.m. on
Friday, the I3th January, 1922, appointed the following
Committee to prepare the detailed agenda and draft reso-
lutions for the Genoa Conference :

Belgium Viscount Davignon.

British Empire .... Sir Maurice Hankey.

France M. Seydoux.

Italy Signor Jung.

Japan M. Tokugawa.

(h) Press Notice.

A Ministerial Committee issued to the Press on the nth
January, 1922, a notice explaining the objects and proposed
procedure of the Genoa Conference. This Press notice is
reproduced in the Appendix to this paper.

318 The Genoa Conference

INTERNATIONAL CORPORATION.

(a) Resolution of the Supreme Council.

The following is the text of a resolution passed by the

Supreme Council at its meeting held at 6.15 p.m. on Tuesday,

the loth January, 1922 :

The Supreme Council approves the establishment of an
International Corporation with affiliated National Cor-
porations for the purpose of the economic reconstruction
of Europe and the co-operation of all nations in the
restoration of normal prosperity, and agrees that a
Committee shall be immediately constituted, composed
of two British, two French, two Italian, two Belgian
representatives and a Japanese representative, with
power to add representatives of other countries :

1. To examine the project in detail ;

2. To conduct any necessary preliminary investigations ;

3. To proceed with the organization of the proposed
Corporation and affiliated Corporations with a view
to its beginning operations at the earliest possible moment ;

4. To report to the Genoa Conference on the progress
made ;

5. To make any recommendations to any of the
Governments concerned or to the Genoa Conference which,
in their view, are likely to assist the purposes of the
Corporation or of the Genoa Conference.

The Governments represented on the Council undertake
to provide immediately in equal shares £10,000 for the
work of the Organizing Committee, and to give all the
support and assistance in their power to the Organizing
Committee and to the Corporation when formed,
(b) Preliminary Meeting of the Organizing Committee.
The Supreme Council at its meeting held at n a.m. on

Friday, the I3th January, 1922, came to the following

decision :

That a preliminary meeting of the Organizing Committee
of the International Corporation for the re-establishment

Appendix I 319

of better economic conditions in Europe should be held
in London in eight or ten days' time, invitations to be
issued by the British representatives. The names of
the representatives (Belgium, France, Italy and British
Empire two each, and Japan one) to be communicated
to the British Secretary, 2, Whitehall Gardens, London,
S.W.i.

PRESS NOTICE REGARDING THE GENOA CONFERENCE.

The Supreme Council have to-day agreed upon the subjects
to be discussed at the Conference which is to be called at
Genoa early in March, in order to facilitate the economic
revival of Europe.

General Objects and Conditions.

The published resolution of the Council of the 6th January
explains the reasons which in the unanimous opinion of
all the nations represented on the Council make necessary
a united effort by all European countries to restore the
economic life of Europe and to remove the obstacles which
at present impede it, and the fundamental conditions of
such a combined effort. These include the recognition
by all countries of their public debts, and compensation for
loss or damage caused by the action of Governments ;
financial and currency conditions which offer reasonable
security for trade and peace amongst nations. Among the
essential objects of the Conference will be the consideration
of the practical measures required to give effect to these
principles, and in particular to secure, without injury to
the provisions of existing treaties, the essential conditions
for the re-establishment of confidence between nations
without which international commerce cannot revive.

Peace.

The first condition which is of prime importance in the
reconstruction of Europe is to establish the relations of all
the countries on the basis of a stable and enduring peace.

820 The Genoa Conference

Financial Subjects.

The Conference will also discuss the financial conditions
which impede revival and the financial measures which
might assist it ; in particular the financial situation in the
several countries in relation to the task of reconstruction ;
the rapid variation in the amount and purchasing power
of the national currencies ; the violent fluctuations in the
relative value of the currencies of different countries as
reflected in the exchanges, and the bearing upon these
problems of the position and status of central banks and
banks of issue. The Conference will examine the conditions
under which public or private credit can best be made
available for the work of reconstruction.

Economic Subjects.

The obstacles to revival, however, are economic as well
as financial. The Conference will therefore consider how
the existing impediments to the free interchange of the
products of different countries can be removed, in particular
by the abolition, as rapidly and completely as possible, of
such new impediments as have resulted from post-war
conditions. The improvement and development of the
transport system will engage special attention ; and among
other questions which might be usefully examined are the
security afforded by the laws and by the legal systems and
commercial documents in the different countries ; the
provision of expert and technical assistance by countries
specially qualified to give it ; the position of consular officers ;
the protection of copyrights ; and the regulations governing
the admission of foreigners for the purpose of carrying on
business.

nth January, 1922.

Viscount Ishii, Japanese Ambassador in Paris. Japanese Delegatejto Conference

•[To face pay e 320.

APPENDIX II

AIDE-MEMOIRE OF STATEMENT MADE BY MR. LLOYD GEORGE
ON BEHALF OF THE BRITISH GOVERNMENT TO M. BRIAND,
CANNES, January qth, 1922.

"The British Government strongly desire that the Cannes
Conference shall lead to definite results which will be ap-
proved by French and British sentiment and also by the
opinion of Europe as a whole. In their judgment the in-
dispensable condition of such success is a close preliminary
understanding between the French and British Governments.

" Public opinion is undeniably anxious and disturbed both
in Great Britain and in France. Questions in which both
countries are deeply interested are rightly believed to be
at stake. There is a general feeling that some of the funda-
mental objects of the peace have not yet been achieved.
The recovery of Europe is delayed beyond expectation.
The disappointment of the peoples provokes irritation, and
irritation leads to misunderstanding and controversy. These
have been reflected throughout Europe and even beyond
Europe with unhappy results.

"The failure of the Cannes Conference would therefore
re-act with very bad effect on the relations of the two
countries. Indeterminate or provisional decisions would be
regarded as tantamount to failure, and would inevitably
accentuate the divergence between French and British
sentiment which has lately made itself felt. Europe would
regard any such consequence with dismay, since its peoples
realize that a close understanding between the British
Empire and France is not only an essential part of the
Entente between the Allies but indispensable to European
welfare and the peace of the world. The British Govern-
ment desire to make it plain at the Cannes Conference that

321 21

322 The Genoa Conference

the British Empire and France stand together as firmly in
the issues of peace as in the ordeal of war.

" In their opinion this is not to be secured by any piecemeal
treatment of the questions by which the Conference is faced.
On the contrary, they consider it absolutely necessary that
the problem should be treated as a whole ; and with this
object in view, they desire to state the position of both
countries, as they see it, at the present time.

" In their opinion there are two principal reasons for
anxiety in France.

" In the first place, French opinion is disquieted on the
subject of reparations. France is endeavouring to repair
her devastated area, and is obliged to advance great sums,
which make a formidable gap in her budget, for that
purpose. This expenditure should and must be met by
Germany ; but in spite of settlement after settlement,
satisfactory reparation by Germany is always postponed.

" In the second place, French opinion is naturally anxious
about the future safety of France. She has been invaded
four times in a hundred and twenty years, and in spite of
the losses of man-power suffered by Germany in the war and
under the peace, France has still a population twenty millions
less than that of the German Empire. Germany, moreover,
possesses in the surviving soldiers of the Great War five
million men trained to arms, and amongst them a very
powerful corps of officers and non-commissioned officers.
It is true that Germany has been deprived of nearly all her
arms and equipment, but France cannot overlook the
possibility that this deficiency may, by one means or other,
be made good. It is therefore essential to her that the
discrepancy between French and German man-power
should be made up in such a way as to guarantee her soil
from another devastating war.

" In Great Britain there is also grave cause for anxiety and
discontent. Britain is a country which lives by its exports,
and its trade has been devastated as terribly as the soil of
France. The consequences in human suffering and priva-

Appendix II 323

tion are very serious. Nearly two millions of the British
working class are unemployed, and their maintenance costs
the country nearly £2,000,000 a week.

"This burden falls upon a community more heavily taxed
than any other in the world and more hardly hit than France
by the economic consequences of the war.

" France is in this way more fortunately situated than other
European countries. Owing partly to the large proportion
of her population which lives upon the land, partly to the
stimulus given to internal production by the needs of her
devastated area, and partly also to the fact that the arrested
condition of emigration to extra-European countries affects
her population much less than those which sent large
numbers of emigrants oversea before the war, she is suffering
less than others from unemployment and from the collapse
of international trade.

" The other peoples of Europe are, however, suffering deeply
from the same causes as the British people. In Italy and
Belgium unemployment is serious. Italy is very dependent
upon foreign trade, and has a greater population to employ
than before the war. Belgium is a food importing country,
dependent upon the European markets for 80 per cent, of her
export trade. In Central, Eastern and South-Eastern
Europe, the collapse and confusion of the normal processes of
economic life are even more marked. Millions are living in
conditions of bitter privation and misery. Even where
inflation has given employment and good wages to the work-
ing class, the relief is temporary and reaction certain, unless
measures are taken in time. Those dependent on small
fixed incomes are suffering still more.

" Russia, a fertile source of raw material and food before the
war, is now in the grip of famine. Millions are faced with
starvation in her great corn-growing lands. In the cause of
humanity and in the cause of their own welfare, to which
the revival of Russia is indispensable, the European peoples
should strive to find some remedy for Russia's present state,
but they have hitherto looked on impotently, not knowing

21*

824 The Genoa Conference

what to do. In the long run, the civilization of Europe must
suffer profoundly from such impotence. In its present state,
it is moving fast towards social and economic catastrophe.

" Profoundly, therefore, as her own interest is engaged in
the economic reconstruction of Europe, Great Britain appeals
in no selfish spirit for the co-operation of all the Allies in
that great human cause. It must be undertaken here and
now. There is an awful aggravation of human misery, and
in some of the parts of Europe an increasing menace to
civilization itself, in every month of delay.

"The problem before Great Britain and France is how to
meet their respective necessities by common action. These
must be met as a whole. Complete frankness between the
statesmen of both countries is essential if the problem is to
be effectively solved. Great Britain fully recognizes France's
ground for anxiety, and desires to do all in her power to allay
it, but she cannot agree to postponing the question of the
reconstruction of Europe, while meeting France's desires in
regard to her reparations and her security. In order to give
satisfaction to French needs, the British Government must
be able to tell the British people that the two countries are
marching together to restore the economic structure and the
general prosperity of the world.

"With regard to reparations, His Majesty's Government
are prepared to abide, so far as they are concerned, by the
arrangements reached in London under which France would
reap considerable advantages while Britain would make
considerable sacrifices. They believe that this arrangement
will meet the essential claims of France until such time as a
wider financial settlement can be attained — perhaps in two
or three years.

" With regard to the safety of France against invasion, Great
Britain will regard this as an interest of her own and is there-
fore prepared to undertake that in the event of unprovoked
German aggression against French soil the British people
will place their forces at her side. There will be a double
value in this guarantee, since it will not only safeguard

Appendix II 825

France in the event of German attack, but will make any
such attack extremely improbable. It is not likely that
Germany would have attacked in 1914, had she realized the
great forces which the British Empire would throw into the
war. In 1914 Germany credited Great Britain with only
six divisions. She knew little or nothing of the character
and resources of the British Commonwealth. She is wiser
now, for she knows that, instead of six divisions only, the
British Empire was maintaining 400,000 men in the field in
France by the end of the first year of the war. These
numbers rose rapidly afterwards, and during the last two
years the Empire maintained a strength of 2,000,000 men in
France and Flanders despite a heavy drain of casualties.
Great Britain called out a total of 6,211,427 men for military
service by land, sea and air. The self-governing Dominions,
India and the Colonies called out 3,284,943. The total
strength thrown by the British Empire into the war was
nearly 10,000,000 men. The losses in killed, wounded and
missing were 3,266,723. The killed numbered 947,364.

"It is inconceivable that Germany should forget these
facts or their significance as a guarantee of French soil.
What the British Empire did once for civilization, it will,
if need be, do again. The great reserves of trained officers
and men which it inherits from the Great War will be
available as long as Germany's own. The vast equipment
manufactured for the war will be available in Great Britain
for at least a generation, whereas that of Germany has been
taken away wholesale by the Allies.

" If, therefore, Germany is certain that the British Empire
will stand by France in a future war, she will not be tempted
to keep alive any dreams of revenge. It is of great impor-
tance to divert the German mind from any such ambitions
as well as to provide for the defeat of those ambitions should
they mature. The British Government believe that both
objects will be met by an undertaking that the two nations
will stand together against an unprovoked attack upon
French soil by Germany, and that such an undertaking

826 The Genoa Conference

must ripen and strengthen the friendship of the two nations
as years go on.

" There are two ways in which this mutual undertaking
could be given.

" The first is by means of an offensive and defensive
alliance. Though such an alliance might seem desirable to
France, it would in reality not serve her interests well,
because such alliances are contrary to British tradition.
The British people understand the claim of France to be
guaranteed against invasion of her soil ; but they would
not willingly be committed to military liabilities for breaches
of the peace elsewhere. Participation in military enter-
prises in Central and Eastern Europe they would not con-
template. An alliance involving, or even appearing to
involve, any such responsibility would not carry the whole-
hearted concurrence of the British people. On the contrary
it would be strongly opposed by large sections of the com-
munity in all parties, and would therefore not be as valuable
to France as an undertaking in another form.

" The second alternative is a definite guarantee that the
British Empire and France will stand together in the
event of unprovoked aggression by Germany against
French soil. This alternative was discussed at the Imperial
Conference last summer, and it is probable that the opinion
of the Empire would support that of Great Britain in
giving such a guarantee to France. It would, therefore,
have far greater weight, for it would, the British Govern-
ment believes, carry with it the whole-hearted opinion,
not of Great Britain alone, but of the Dominions. The
real danger to France is from German invasion. She cannot
be invaded by any other nation. A guarantee against
German invasion secures her safety beyond doubt. This,
therefore, is the alternative, which His Majesty's Govern-
ment prefer to adopt. They propose the draft Treaty
between Great Britain and France attached to this memo-
randum as the form of engagement best calculated to pro-
tect the common interests of both Powers in Western Europe.

Appendix II 327

" In order, however, that effect may be given to it, it is
necessary that the Treaty should be accompanied by a
complete Entente between the two countries. This was
the basis of the agreement of 1904, which gave France
the support of Great Britain in the war, and it is equally
essential now.

" His Majesty's Government consider that the first
condition of a true Entente is the avoidance of naval com-
petition between the two countries. With regard to
submarines they fully understand that the divergence of
French and British views on the subject may be due to
different ideas of the uses which submarines can serve.
The British opinion, however, based on four years' war
experience, is that submarines are effective only against
merchant ships and are ineffectual otherwise as instruments
either in attack or defence. British opinion would inevit-
ably insist on a heavy programme of anti-submarine craft
if the French submarine programme were carried out, and
the two countries would thus be launched on a course of
competitive naval construction. The British Government
cannot disguise the fact that any such development would
re-act very seriously on British sentiment towards France,
and French sentiment towards Great Britain. Britain's
sea communications are to Britain what France's eastern
frontier is to France. Naval competition in any form
between Great Britain and France would corrode goodwill.
His Majesty's Government, therefore, propose as the condi-
tion of the Treaty and Entente which they contemplate
that the Admiralties of the two countries shall confer
together regarding their naval programmes in order that
all competition in shipbuilding may be avoided between
them.

' The British Government also strongly desire that
France shall co-operate whole-heartedly with Great Britain
in the economic and financial reconstruction of Europe.

' They, therefore, look for the agreement of France to
the immediate summoning of an Economic Conference at

328 The Genoa Conference

which all the Powers of Europe, including Russia, would
be represented. The economic collapse of Central, Eastern,
and South-Eastern Europe is now the most serious factor
in the paralysis of European trade ; and it cannot be
remedied unless the produce and the markets of Russia
are once more made available to the world. The presence
of the real leaders of Russia is therefore necessary, in the
opinion of the British Government, to the success of such
a conference. No useful object is served by forwarding
conditions in writing to Moscow. It is most important
to deal, if possible, direct with the heads of the Russian
Government, and the Conference should be held as soon
as possible at the most suitable centre for that purpose.

" In order to trade with Russia, certain assurances and
guarantees are essential.

" It should be pointed out that while nations can claim
no right to dictate to each other regarding the principles
on which they are to regulate their system of ownership,
internal economy and government, foreign capital cannot
be made available to assist a country until foreign investors
are assured that their property and their rights will be
respected, and the fruits of their enterprise secured to them.
The sense of security cannot be re-established unless the
Governments of countries desiring foreign credit feeely
undertake :

(a) To recognize all public debts and obligations, as
well as the obligation to restore or compensate all foreign
interests for loss or damage caused to them when property
has been confiscated or withheld.

" (b) To establish a legal and judicial system which
sanctions and enforces commercial and other contracts
with impartiality.

" Finally, an adequate means of exchange must be avail-
able, and, generally, there must be financial and currency
conditions which offer sufficient security for trade.

" His Majesty's Government would also lay down the
two following principles :

Appendix II 829

" i. All nations should undertake to refrain from
propaganda subversive of order and the established political
system in other countries than their own.

" 2. All countries should join in an undertaking to refrain
from aggression against their neighbours.

" His Majesty's Government have indicated the importance
of agreement upon naval construction, because they con-
sider it indispensable to that complete Entente between
Great Britain and France which they desire to maintain.
In the same spirit they would desire to clear away all ques-
tions on which controversy between the two countries is
possible.

" It is essential, for instance, that peace in the Near
East shall be restored, and that there shall be absolute
agreement between France and Great Britain as to the
Allied policy to be pursued. The same consideration applies
to other important points at issue in foreign affairs, which
have hitherto, in some measure, impeded a complete
understanding.

" The time has passed when statesmen could pledge their
countries to engagements without full regard to the popular
sentiment which they represent. In order that the Treaty
of Guarantee proposed should be of lasting value to both
countries, it is essential that the democracies of the British
Empire and the French Republic should feel assured that
they are guided by similar purposes and harmonious ideals.
All questions, therefore, should be cleared away which may be
capable of dividing the sentiment of the two countries and
marring their accord. His Majesty's Government are con-
fident that there are no outstanding questions which cannot
be solved in a manner satisfactory to both Governments
and that the Treaty of Guarantee between the two countries
may thus be sealed and confirmed by a complete and a
durable Entente.

" It is, moreover, their particular desire that this Entente
between Great Britain and France, so far from excluding
other nations, should form the basis of a wider scheme of

830 The Genoa Conference

international co-operation to ensure the peace of Europe
as a whole. They look confidently to what can be accom-
plished by collaboration between the Allies in this purpose.
The last of the conditions laid down in this Memorandum
as the basis of the proposed Economic Conference propounds
a simple condition of international accord :

' That all nations should join in an undertaking to
refrain from aggression against their neighbours.' The
hope of Great Britain is to secure this undertaking from all
the nations of Europe without exception.

" It is essential that the division of the European nations
into two mighty camps should not be perpetuated by narrow
fears on the part of the victor nations or secret projects
of revenge on the part of the vanquished. It is essential
that the rivalries generated by the emancipation of nations
since the war should be averted from the paths of interna-
tional hatred and turned to those of co-operation and good-
will. It is essential, also, that the conflict between rival
social and economic systems which the Russian revolution
has so greatly intensified should not accentuate the fears
of nations and culminate in international war.

" If the conditions created in Europe by these new
rivalries and divisions are not wisely handled by co-opera-
tion between the Powers, peace can only be short-lived, and
Europe will be plunged by the coming generation into
another fierce struggle, which may overwhelm its civiliza-
tion in even completer ruin and despair. It is for the
Allies, to whom the war has bequeathed a position of vast
responsibility and far-spreading power, to stand together
against this menace, to combine their influence in averting
it, and to make sure that in the heart and will of their own
peoples, who fought and bled for civilization, the cause
of civilization prevails. Great Britain, therefore, offers to
France and Italy her intimate and earnest co-operation
in building up a great system of European accord, which
will put the maintenance of peace between nations and the
reduction of national armaments in the forefront of its

Appendix II 83 1

aims ; for only so in their belief will Europe secure that
sense of safety amongst nations, great and small, which
through the many centuries of its political history it has
never yet attained. If the Economic Conference is agreed
to, it will create an opportunity for the great Allied Powers
— France, the British Empire and Italy — to inaugurate an
era of peace in their own Continent whose war-sodden fields
record a history more terrible than that of any other
continent of modern times.

"DRAFT OF ARTICLES OF PROPOSED TREATY BETWEEN THE
GOVERNMENTS OF THE BRITISH EMPIRE AND THE FRENCH
REPUBLIC.

"I. In the event of direct and unprovoked aggression
against the soil of France by Germany, Great Britain will
immediately place herself at the side of France with her
naval, military and air forces.

"II. The High Contracting Parties reassert their common
interest in Articles 42, 43 and 44 of the Treaty of Versailles,*
and will consult together should any breach of them be
threatened or any doubt arise as to their interpretation.

" III. The High Contracting Parties undertake further
to concert together in the event of any military, naval or
air measures inconsistent with the Treaty of Versailles
being taken by Germany.

" IV. The present Treaty shall impose no obligations

" *Articles 42, 43 and 44 read as follows :

" Article 42. — Germany is forbidden to maintain or construct any forti-
fications either on the left bank of the Rhine or on the right bank to the
west of the line drawn 50 kilo, to the east of the Rhine.

" Article 43. — In the area denned above the maintenance and assembly
of armed forces, either permanently or temporarily, and military manoeuvres
of any kind, as well as the upkeep of all permanent works for mobilization,
are in the same way forbidden.

" Article 44. — In case Germany violates in any manner whatever the
provisions of Articles 42 and 43, she shall be regarded as committing a
hostile act against the Powers signatory of the present Treaty, and as
calculated to disturb the peace of the world."

882 The Genoa Conference

upon any of the Dominions of the British Empire unless
and until it is approved by the Dominion concerned.

" V. This Treaty shall remain in force for a period of
ten years, and shall, if approved by both parties, be renewable
at the end of that period.

" Cannes,

January, 1922."

APPENDIX III

PRELIMINARY MEETINGS FOR THE GENOA
CONFERENCE

EXPERTS' REPORT

The economic and financial experts of the Powers respon-
sible for the summoning of the Conference at their meeting
for the exchange of views, after examining together a number
of suggestions and schemes, have prepared draft resolutions
embodying the ideas and proposals which met with general
acceptance.

The drafts are set forth in the pages of this report, arranged
under the following headings :

PART I

RUSSIA

Section I. — Preamble.

Section II. — Conditions under which foreign enterprise
and capital can be enlisted for the restoration of Russia.
Chapter I. — Liquidation of past obligations.
Chapter II. — Provisions for the future.
Section III. — Measures by which the speedy recovery of
Russia would be facilitated.

PART II

RESTORATION OF EUROPE

Section I. — Financial provisions.
Section II. — Economic provisions.
Section III. — Transport provisions.

333

884 The Genoa Conference

PART I

RECONSTRUCTION OF RUSSIA
SECTION I

PREAMBLE

The question of Russia has been approached both from the
point of view of what is equitable and from the point of view
of what is necessary for the economic restoration of Russia.

The economic restoration of Russia is largely dependent
upon her enlisting the support of foreign enterprise and
capital. Without a considerable transformation of the pre-
vailing conditions which affect particularly trade and industry
foreigners will be reluctant either to return to their former
undertakings or to start fresh undertakings. So long as
precarious and unstable conditions continue, only speculators
will be willing to venture on trade, and there is a fear that
the chief result would be not the reconstruction but the
exploitation of Russia and the Russian people, which it is
the purpose of the Governments represented at Genoa to avoid.

Effective co-operation between Russia and other European
countries will be difficult to realize unless a determination is
shown in Russia to set to work wholeheartedly to restore the
economic life of Russia. The foundation is agriculture, and here
no less than elsewhere security both in respect of holdings and
of the disposal of crops is an essential pre-requisite of revival.
Once this security is realized there is no doubt that foreign
help will be forthcoming in the shape of agricultural imple-
ments and loans.

In the industrial sphere it is even more apparent that
revival cannot be expected in the absence of foreign assistance
and capital, which will only become available when the good-
will and co-operation of the Russian Government can be
relied upon. Active measures will be necessary for the pro-
tection and liberty of action of employers, their employees,
and for the protection of their industrial operations and their
capital, combined with the right to hold the movable and

Appendix III 885

immovable property necessary for the conduct of business
and with the liberty to import what is requisite and to dispose
of the products of their undertakings. Much the same may
be said of transport, in which case foreign firms will have to
be relied upon for the furnishing of material and plant, in-
cluding fresh rolling stock, and the setting-up of repair shops ;
and it needs no emphasis that the reorganization of transport
is essential to the industrial and agricultural recovery of Russia.
The question of the instrument by which effect could be
given to these conditions and to contingent provisions has
not been considered, nor the relation of any such instrument
to existing trade agreements with Russia. These with certain
other questions have been reserved as political. Indications
are given in the drafts which follow of some of the points
reserved.

SECTION II

Conditions under which foreign enterprise and capital can be

enlisted for the restoration of Russia.
The Section is divided into two chapters :

Chapter I. — Liquidation of past obligations.

Chapter II. — Provisions for the future.

CHAPTER I

NOTE. — It will be understood that the proposals drafted
relating to claims (Articles i — 7 and the Annexes) are with-
out prejudice to any advice which Governments may think
fit to obtain from the parties interested in the settlement,
whether as being entitled under contracts with former
Russian Governments or as having suffered loss since the
events of 1917.
Article I. The Russian Soviet Government shall accept the

financial obligations of its predecessors, viz., the Imperial

Russian Government and the Russian Provisional Government,

towards foreign Powers and their nationals.

NOTE. — The question whether the title " Russian Soviet
Government " applies only to the Soviet Government at
Moscow or should include all other Soviet Governments in

336 The Genoa Conference

Russia is a political one which it is for the Governments to

decide. Similarly, no precise definition is attributed to the

words " Russia " and " Russian."
The same applies to the question whether, and, if so, to

what extent, new States which have been recognized as such

and which were formerly part of Russia, as well as States

which have acquired part of the former territory of Russia,

should undertake part of the obligations dealt with in these

provisions.

Article 2. The Russian Soviet Government shall recognize
the financial engagements entered into before this date by all
authorities in Russia, provincial or local, or by public utility
undertakings in Russia, with other Powers or their nationals,
and shall guarantee the fulfilment thereof.

Article 3. The Russian Soviet Government shall undertake
liability for all actual and direct losses, whether arising out of
breach of contract or otherwise, suffered by nationals of other
Powers, due to the action or negligence of the Soviet Govern-
ment or its predecessors or of any provincial or local
authorities, or of an agent of any such government or authority.

Article 4. The liabilities under the preceding Articles will be
determined by a " Russian Debt Commission " and by " Mixed
Arbitral Tribunals " to be set up. A scheme for the establish-
ment of these bodies is contained in Annexes I. and II. They
shall determine the amount and method of payment to be
made, whether by way of compensation or otherwise, as laid
down in Annexes I. to III.

Article 5. All inter-governmental debts, liabilities and
obligations of every sort which arose between the Russian
Government on the one hand and a foreign Government on the
other hand after August ist, 1914, shall be considered to be
completely discharged by the payment of the net sums laid
down in a schedule to be agreed.

Article 6. Without prejudice to the provision of Article 116
of the Treaty of Versailles, the net sums fixed under Article 5
shall take into account all claims by Russian nationals for loss
or damage arising directly from hostile military or naval

Appendix III 337

operations, or from other operations of a similar nature and
any other claims specified at the time of the adoption of the
schedule referred to in Article 5.

Article 7. Balances standing to the credit of a former
Russian Government in any bank situate in a country the
Government of which made advances to a former Russian
Government between August i, 1914, and November yth,
1917, shall be transferred to the Government which made the
advances and the liability of the Russian Soviet Government
in respect of the advances shall be pro tanto reduced.

The transfer provided for in the preceding paragraph shall
not prejudice the rights of third parties.

This Article shall also apply in the case of any country the
Government of which has assumed responsibility for any
Russian Government loan floated in that country in the period
named.

ANNEXES

NOTE. — With regard to the security on which the Russian
debt is in future to be charged, two solutions have been put
forward by different delegations. They are shown, where
necessary, in parallel columns in Annexes I. to III. Agree-
ment has not been arrived at in favour of either of these two
solutions or of any of the numerous intermediate solutions
which might be devised.

ANNEX I

RUSSIAN DEBT COMMISSION

1. A Russian Debt Commission shall be established con-
sisting of members nominated by the Russian Government
and members nominated by the other Powers, together with
an independent Chairman chosen from outside by agreement
among the other members, or, in default, named by the League
of Nations, either through the Council or through the Perma-
nent Court of International Justice.

2. The Commission will have the following functions :

(a) To constitute and prescribe the procedure of the
Mixed Arbitral Tribunals, to be set up in accordance with

338 The Genoa Conference

the provisions of Annex II., and to issue such instructions as
may be necessary in order to secure uniformity in their
proceedings.

(b) To issue new Russian Bonds in accordance with the
provisions of Annex II. to persons entitled thereto, under
awards of the Mixed Arbitral Tribunals, to holders of existing
State bonds and other bonds and stock for which the new
Russian Bonds are to be given in exchange, and to persons
entitled thereto in respect of funded interest and repayment
of capital. The rate of interest adopted for the purpose of
calculating the present value of claims shall be the same as
that prescribed under Annex III., paragraph 2.

(c) To determine all questions arising out of the issue,
rates of interest and terms of redemption of the new Russian
Bonds referred to in paragraph (6) .

(d) nil. (d) To determine, if neces-

sary, among the revenues of
Russia, those which should
be specially assigned to the
service of the debt, for
example an allocation of
certain taxes or of royalties
or dues upon undertakings
in Russia.

Should occasion arise to
control, if the Commission
thinks fit, the collection of all
or part of these assigned
revenues, and to deal with
the proceeds.

These assignments and this
control (if imposed) should
cease as soon as the Russian
debt service appears ade-
quately assured by the in-
clusion of the appropriate
sums in the Russian budget.

Appendix III 339

ANNEX II

DETERMINATION OF CLAIMS

1. The liabilities of the Russian Government under Articles
i to 3 shall be assessed in accordance with the following
principles :

2. The responsibility for claims provided for in Article 3
shall be determined by the Mixed Arbitral Tribunals in ac-
cordance with the provisions of this Report and in default with
the general principles of International Law.

3. Russian Government bonds in foreign currencies will be
revived with all the conditions of the contract, but interest and
repayment of capital due from the date when payments ceased
until (November ist, 1927) will be funded,

and the bonds will be secured
in the same way as the new
Russian Bonds in accordance
with Annex III., 5.

4. Provincial, Municipal, Railway or Public Utility Bonds
in foreign currencies will be revived with all the conditions of
the contract, but interest and repayment of capital due from
the date when payment ceased until (November ist, 1927)
will be funded. All such bonds shall be guaranteed by the
Soviet Government whether guaranteed by any former
Government of Russia or not,

and the bonds will be secured
in the same way as the new
Russian Bonds in accordance
with Annex III., 5.

5. Russian Government Rouble Loans or Provincial, Muni-
cipal, Railway or Public Utility Bonds issued in roubles will,
if proved to have been continuously in foreign ownership since
the date of repudiation by the Russian Government, be ex-
changeable into new Russian Bonds.

The present value of the obligations in respect of capital
and interest embodied in the original bond, in so far as they

22*

340 The Genoa Conference

have not been fulfilled, shall first be calculated in roubles, and
then converted into the foreign currency at the rate deter-
mined in paragraph 16. The present value of the new bond
should be equal to the present value in the foreign currency
of the original bond, interest being calculated at the rate
to be prescribed under the provisions of Annex III., 2.

6. New Russian Bonds will be issued in respect of funded
interest and capital due for repayment between the date
when payment ceased and (November i, 1927).

7. Claims not provided for under Paragraphs 3 to 5 of this
Annex in respect of injury to property, rights and interests
shall, subject to any agreements between the Soviet Govern-
ment and such of the other Powers as may be concerned, be
dealt with on the following principles:

Claimants will be entitled to demand the return of the
property, rights and interests.

If the property, rights or interests are still in existence and
capable of identification, they will be returned and com-
pensation for their use or for injury thereto during the dis-
possession will in default of agreement between the Soviet
Government and the private party concerned be settled by the
Mixed Arbitral Tribunals. Agreements for concessions in
relation to public utility undertakings shall be modified so
as to be brought into harmony with present economic con-
ditions, for example as regards charges, duration of concessions
and conditions of operation.

If the property, rights and interests are not still in existence
or cannot be identified, or the claimant does not desire their
return, the claim may by agreement between the Soviet
Government and the private party concerned be satisfied
either by the grant of similar property, rights or interests,
coupled with compensation to be agreed, or failing agreement
to be fixed by the Mixed Arbitral Tribunals, or by any other
agreed settlement.

In all other cases claimants shall be entitled to compensa-
tion on a monetary basis to be fixed by the Mixed Arbitral
Tribunals.

Appendix III 341

NOTE. — In the opinion of the experts it may be necessary
to add some condition in the case of claims for destruction,
loss or damage of property, rights or interests which were
acquired subsequent to the events of 1917. It might be
desirable to give the Mixed Arbitral Tribunals a discretion,
in some cases at any rate, to take the matter into account
when they are satisfied that the price at which the property
was acquired renders payment of compensation on the
basis of the full value of the property inequitable.

8. The tribunal in assessing compensation shall take
account primarily of the actual value in roubles of the property,
rights or interests at November ist, 1917, but may make
allowance for any temporary and special circumstances which
may at that time have materially affected the value.

9. Where a debtor is entitled, or if he had been a national
of one of the other Powers, would have been entitled, to claim
compensation under Chapter I., the creditor may (whether the
debtor has claimed compensation or not) make a direct claim
against the Soviet Government in respect of the loss arising
from his unpaid debt instead of against the debtor.

Any property restored in accordance with paragraph 7
shall be subject to any charges or obligations attaching thereto
upon November ist, 1917, without prejudice to the rights of
creditors to make a direct claim against the Soviet Government.

10. Any liability met by the Soviet Government under the
preceding paragraph will be set off against the compensation
payable to the debtor ; but if the Soviet Government has
already paid the compensation to the debtor, it may recover
from the debtor the amount paid to the creditor, but the
liability of the former may be discharged in new Russian
Bonds.

n. Russian financial, industrial and commercial companies
which on November ist, 1917, were controlled by nationals
of other Powers, or in which at the same date such nationals
possessed a substantial interest, shall, if the majority of the
foreign interests (shareholders and bondholders) so desire,

342 The Genoa Conference

be covered by the term " Nationals of other Powers " wherever
used in Chapter I. and the Annexes.

12. In cases in which a claim is not made under the preceding
paragraph or other provision of this Chapter or its annexes,
any national of the other Powers who is a shareholder in any
Russian Company whatever may claim compensation in
accordance with Article 3 for the injury done to his holding
in the company.

13. Claims, excluding those referred to in paragraphs 3 to 5
above, but including claims for monetary compensation arising
from death or personal injury, shall be referred by the Com-
mission for adjudication and assessment on a monetary basis
as promptly as possible by Mixed Arbitral Tribunals.

14. All claims shall be registered with the Russian Debt
Commission, and options shall be exercised within one year
from the establishment of the Commission or such longer
period as may be permitted by the Commission for particular
cases or classes of cases. The Russian Soviet Government
shall not be liable in respect of any claim not registered within
the prescribed period.

15. No claim shall be recognized in respect of rights which
had ceased legally to exist before March, 1917.

16. The rates of conversion between paper roubles and the
various foreign currencies will be fixed by the Russian Debt
Commission at the time of issuing the new Russian Bonds.
For this purpose the Commission will first ascertain the average
gold value of the rouble in October, 1917, and will then calculate
the equivalent of that gold value in each of the foreign currencies
at the time of the issue of the bonds.

17. Interest at the rate prescribed under paragraph 2 of
Annex III. shall accrue as from November ist, 1917, on all
amounts awarded by the Tribunal.

Appendix III 348

ANNEX III

NEW RUSSIAN BONDS

1. All accepted claims for monetary compensation against
the Russian Soviet Government will be met by the issue of
new Russian Bonds up to the amounts fixed by the Mixed
Arbitral Tribunals. The terms of issue of the bonds, together
with all questions arising out of the conversion of existing
bonds, and out of the new issues, will be determined by the
Russian Debt Commission.

2. The Bonds shall carry a rate of interest to be determined
by the Russian Debt Commission. They shall be free both as
to interest and capital from all Russian taxation both present
and future and shall be subject to redemption by annual
drawings.

3. In general the bonds will be expressed in the currency
of the holder's country. Nevertheless the Debt Commission
may allow him, if he so requests, to take bonds in the currencies
of certain specified countries.

4. In order to determine the value of the bonds for any
payment under these provisions the bonds shall be discounted
at the rate of interest prescribed under paragraph 2 above.

5. The bonds shall be a or 5. The bonds shall be a
charge on the whole assets charge, primarily upon assets
of the Russian State, selected by the Russian

Commission in accordance
with Annex I., 2 (d) and
secondarily on the whole
assets of the Russian State.

6. Interest shall be funded and the Russian Soviet Govern-
ment shall not be required to redeem any bonds until (Novem-
ber ist, 1927). It shall be within the competence of the Debt
Commission to issue bonds of a special series in respect of
funded interest. Any such Interest Bonds shall carry the
same rights and be in all respects the same as the new Russian
Bonds, except for a preferential right for redemption during
the moratorium period if any redemption be then possible.

344 The Genoa Conference

7. The Russian Soviet 7. The Russian Debt Corn-
Government shall be permitted mission will decide whether
to make drawings, if it desires the yield of the assigned
to do so, before the expiration revenues permits of drawings
of the moratorium period, before the expiration of the
giving priority to the Interest moratorium period ; in such
Bonds. drawings priority shall be

given to the Interest Bonds.

CHAPTER II

A. — ADMINISTRATION OF JUSTICE

Article 8. The Russian Soviet Government shall undertake
to provide for the good administration of justice in accordance
with the following principles :

(1) Independence of the judicial authority vis-d-vis the
executive authority.

(2) Administration of justice in public by professional
judges who must be independent and irremovable.

(3) The law to be applied must be known and published ;
it shall be equal between persons and have no retro-active
effect. It shall afford adequate guarantees to foreigners
against arbitrary arrests and domiciliary visits.

(4) Foreigners shall have free access to the courts and
no disability shall attach to foreigners as foreigners ; they
shall be entitled to be represented before the courts by
counsel of their own choosing.

(5) The rules of procedure to be observed in the courts
shall be such as to facilitate the thorough and rapid adminis-
tration of justice. The right of appeal and of new trial
shall be assured.

(6) The parties to a contract shall have the right to provide
that a foreign law shall apply ; the courts must in such
case apply that law.

(7) Just procedure shall be established in order to ensure
the execution of valid foreign judgments, including judg-
ments of foreign courts based on a provision in a commercial
contract conferring jurisdiction on that court.

Appendix III 845

(8) The validity of a clause in contracts for the arbitration
of any or all disputes arising therein shall be recognized
and shall be made for enforcing arbitration awards, including
those given in a foreign country.

B. — CONDITIONS OF RESIDENCE AND TRADE IN RUSSIA

Article 9. The Russian Soviet Government shall undertake
to permit the entry and egress of foreigners into and from its
territory in accordance with the usual practice of States.

Article 10. Foreigners, while sojourning in Russia, shall be
exempted from all kinds of compulsory services and from any
contributions whatever imposed as an equivalent for personal
service ; they shall not be subject to any forced loans.

Article n. Foreigners shall be at liberty to communicate
freely by post, telegraph or wireless telegraph, and to use
telegraph codes under the conditions and subject to the
regulations laid down in the International Telegraph Con-
ventions.

Article 12. Foreigners shall enjoy all protection, rights and
facilities which are necessary to enable them to carry on any
permitted trade, profession or occupation in accordance
with the usual practice of States ; they shall not be subject
to any discriminating legislation or restrictions on account
of their nationality. They shall not be compelled to join
any local organization.

Article 13. No discrimination against the workmen
employed in undertakings belonging to foreigners or directed
by foreigners shall be exercised in respect of military service,
or forced labour ; nor shall any taxation be levied in lieu
thereof.

Article 14. Foreigners shall have adequate facilities for
travelling on Russian railways, roads and waterways, and
for the carriage of their goods and merchandise. These
facilities shall not be less than those accorded to Russian
Government enterprises or Russian nationals, and shall be
applied without discrimination.

Article 15. Requisitions shall not be imposed save in

S46 The Genoa Conference

exceptional circumstances, and subject to adequate com-
pensation payable at the time.

Article 16. Foreign companies and associations duly con-
stituted shall be allowed to carry on any business open to
foreigners in Russia, and for this purpose shall have the same
rights as private individuals, including that of appearing
before the tribunals.

Article 17. Foreign firms or individuals, and also foreign
companies and associations, carrying on any permitted trade,
profession or occupation in Russia, shall be subject to no
higher taxation than is borne by Russian nationals.

The system of taxation shall not in practice impose on
branches of foreign companies carrying on permitted trades,
professions and occupations in Russia any greater burden of
taxation than on similar businesses carried on there by Russian
companies.

Article 18. The Russian Soviet Government shall be invited
to become a party to the International Conventions for the
protection of industrial, literary and artistic property.

C. — TREATIES AND CONVENTIONS

NOTE. — All questions concerning political treaties and
conventions are reserved.

Article 19. The multilateral conventions and agreements of
an economic, technical or legal character, to which the former
Russian Governments were parties, shall be regarded as still
binding on Russia.

Article 20. Contributions owing by Russia in respect of the
upkeep of any central bureau or office established by any
treaty or convention referred to in Article 19 shall be paid.
All other claims by or against Russia arising out of the non-
fulfilment of the provisions of such treaties or conventions
shall be waived.

Article 21. Subject to the provisions contained in Chapter I.
any bilateral treaties, conventions or agreements of an
economic, technical or legal character between Russia and a
foreign Power not already denounced shall not be regarded

Appendix III 847

as having lost their force, but their continuance shall be dealt
with independently between Russia and the Power concerned.

SECTION III

MEASURES BY WHICH THE IMMEDIATE RESTORATION OF RUSSIA
WOULD BE FACILITATED

The re-starting at the earliest moment of undertakings
of all kinds, which belonged to foreigners before the events
of 1917, and the establishment of fresh undertakings would
be of the greatest assistance in bringing about the speedy
reconstruction of Russia.

This being so, in the present situation the speedy recovery
of Russia would be facilitated by the following :

Article 22. Foreigners, who enter Russia to practice their
profession, trade, industry or occupation, shall be free to
import into Russia such food, apparel and tools as are
necessary for their personal use, and these shall not be liable
to any kind of requisition.

They may, under the same conditions, import food and
apparel for the exclusive use of their staffs or of the workmen
whom they employ, whether Russian or foreign. The same
shall apply especially to medicines, surgical dressings etc.,
which they may need for themselves and for their staff.

Article 23. The visa of passports by the competent Russian
authorities shall confer on holders complete protection by the
Russian authorities and the free exercise of their industry,
trade, occupation or profession.

Article 24. No domiciliary search may be made in the
residence or establishment of a foreigner settled in Russia,
nor may his arrest be carried out without the assistance or
consent of his Consul.

In the case of an appearance before a Russian Court on a
criminal charge, judgment can only be carried out with the
consent of the Consul concerned.

The only punishment that may be inflicted as a result of a
prosecution on political grounds is expulsion, subject to the
above condition.

848 The Genoa Conference

Article 25. Undertakings belonging to foreigners or directed
by them shall be worked under conditions of freedom, including
freedom of engagement or discharge of workmen subject
only to the application of laws of hygiene and to conditions
of labour in accordance with the general practice of other
countries.

In case of need, wages shall be fixed by committees repre-
senting employers and employed.

Article 26. The acquisition in Russia and abroad of all
products and raw material necessary for the restoration of
industry and their transport shall be specially facilitated by
the Russian Government.

Article 27. Duties, taxes, and other charges on the
industry, trade or occupations of foreigners settled in Russia,
shall not be such as to prevent a reasonable return on
invested capital.

Article 28. Free zones shall be created in a certain number
of ports.

PART II
RESTORATION OF EUROPE

The drafting of a Convention has not been attempted, but
the resolutions are in such a form that their substance could,
if it were thought desirable, be embodied in a Convention.
The resolutions are arranged in three groups, viz. :
Section I. — Financial.
Section II. — Economic.
Section III. — Transport.

SECTION I
FINANCIAL SECTION
CHAPTER I

CURRENCY

Article 29. An essential requisite for the economic re-
construction of Europe is the achievement by each country of
stability in the value of its currency. No country can gain

Appendix III 849

control of its own currency so long as there is a deficiency in
the annual budget which is met by the creation of paper
money or bank credits. It is for every country to overcome
such a deficiency by its own independent efforts ; only then
will its way be open to currency reform.

Article 30. Measures of currency reform will be facilitated
if the practice of continuous co-operation among central
banks can be developed. A permanent association or entente
for the co-operation of central banks, not necessarily confined
to Europe, would provide opportunities of co-ordinating
credit policy, without hampering the freedom of the several
banks. It is suggested that an early meeting of representatives
of central banks should be held with a view to considering how
best to give effect to this recommendation.

Article 31. It is desirable that all European currencies
should be based upon a common standard.

Article 32. Gold is the only common standard which all
European -countries could at present agree to adopt.

Article 33. In a number of countries it will not be possible
for some years to restore an effective gold standard ; but
it is in the general interest that European Governments should
declare now that this is their ultimate object, and should
agree on the programme by way of which they intend to
achieve it.

Article 34. In each country the first step towards re-estab-
lishing a gold standard will be the balancing of the annual
expenditure of the State without the creation of fresh credit
unrepresented by new assets.

Article 35. The next step will be to determine and fix the
gold value of the monetary unit. This step can only be
taken in each country when the economic circumstances
permit ; for the country will then have to decide the vital
question, whether to adopt the old gold parity or a new parity
approximating to the exchange value of the monetary unit
at the time.

Article 36. These steps might by themselves suffice to
establish a gold standard, but its successful maintenance

350 The Genoa Conference

would be materially promoted, not only by the proposed
association or entente of central banks, but by an international
convention to be adopted at a suitable time. The purpose of
the convention would be to centralize and co-ordinate the
demand for gold, and so to avoid those wide fluctuations in
the purchasing power of gold, which might otherwise result
from the simultaneous and competitive efforts of a number
of countries to secure metallic reserves. It is suggested
that the convention should embody some means of econo-
mizing the use of gold by maintaining reserves in the form of
foreign balances, such, for example, as the gold exchange
standard, or an international clearing system.

CHAPTER II

CREDITS

Article 37. Whilst private credit will undoubtedly again
become available as soon as currencies are stabilized and
confidence is restored, it is recognized that under existing
conditions special machinery is necessary for facilitating the
immediate co-operation of the economically stronger countries
for reconstruction purposes. The negotiations now proceed-
ing for the establishment of an International Corporation are
accordingly to be welcomed.

Article 38. It is essential for countries in need of credits
to take steps at once to make their assets available to serve
as security for the assistance they require, whether through
the proposed International Corporation or through other
channels ; for this purpose they should enter into consulta-
tion at the earliest possible moment with the Corporation,
when established, or with other agencies for the purpose of
securing such co-operation.

CHAPTER III

EXCHANGES

Article 39. One of the chief obstacles in the way of the
restoration of trade is the collapsed condition and instability
of many of the European exchanges, and this is mainly due

Appendix III 351

to the continual depreciation of currency, the failure of pro-
duction for export and the lack of trade facilities.

The artificial control of operations in exchange, whether
by requiring a licence for transactions in exchange, or by
limiting the prices at which transactions may be effected, or
by preventing free dealings in forward exchange, are futile
and mischievous.

It is therefore recommended that all regulations of the kind
indicated attempting to limit fluctuations in exchange by
means of artificial control of exchange operations should be
abolished at the earliest possible date.

Article 40. Within twelve months after substantial progress
has been made in the restoration of a country's exchanges,
any special restrictions imposed on imports from that country
on the ground of depreciated exchange should be removed.

NOTE. — Some of the experts desired to add that the pro-
hibition of transactions for any specified purposes was
equally to be condemned, but others were unable to accept
this without the qualification that it was subject to any
regulations which may be adopted solely for the purpose
of preventing the export of capital.

SECTION II
ECONOMIC SECTION

CHAPTER I

CUSTOM TARIFFS AND RESTRICTIONS

Article 41. In view of the agreement relative to restrictions
and prohibitions signed by the representatives of certain
States at the Conference at Porto Rosa (Protocol No. i) in No-
vember, 1921, it is suggested that those States should adopt
the recommendations of that Conference, and should take
the necessary measures to give effect to them without delay.

Article 42. Inasmuch as the development of normal trade
with all countries is only possible where traders are in a
position to ascertain some time in advance the conditions
under which goods can be legally imported into, and exported

852 The Genoa Conference

from, each country, it is proposed that any Customs duties
and Customs restrictions incident to importation and exporta-
tion should be regulated by the following principles :

A. — CUSTOMS TARIFFS

Article 43. All Customs Tariffs should be published ; such
publication should be accompanied by a clear and precise
indication in regard to each category of goods of all the duties
which are leviable on the importation or exportation of the
goods concerned.

Article 44. The tariffs should be made so far as possible
applicable over substantial periods of time, and changes in
rates and hi customs regulations should be made as rarely as
possible and duly published, the practice of frequent modifi-
cation for the purpose of economic warfare being entirely
abandoned.

Article 45. No duties should be maintained or imposed after
... on the exports of raw materials other than such duties
as are found desirable for revenue purposes ; export duties
imposed for such purposes should be applied without any
discrimination as between different foreign countries of
destination.

B. — IMPORT AND EXPORT PROHIBITIONS

Article 46. The system of prohibition or restriction of
imports or exports which certain States have introduced tem-
porarily to protect their finances or to control their markets
is in principle injurious from the point of view of the economic
restoration of Europe. Every country has, nevertheless, the
right, unless precluded by treaties, to prohibit absolutely
the importation of goods of certain descriptions in the interests
of national health, national security, national morals, or for
other special purposes, or to allow the importation of specified
commodities only if consigned to recognized organizations,
either for the purpose of giving effect to a State monopoly, or
for seeing that the whole importation is put to a specified use ;
but prohibitions framed for any such purpose should be pub-

Appendix III 853

licly announced and as limited in extent as possible. Such
prohibitions and monopolies should not be used for the pur-
pose of discriminating arbitrarily between different foreign
markets or different sources of supply.

Article 47. Where for any reason it is desired to limit the
amount of any commodity to be imported through ordinary
trade channels, such limitation should be effected by the
medium of customs duties rather than by a system of pro-
hibition modified by licences ; every Government should at
once examine the possibility of abandoning or reducing to the
smallest possible dimensions the number of goods to which
the latter system is applied, so that the general pre-war
position in this regard may be attained as soon as possible,
and in any case before . . . save in so far as it has been
modified by general International Conventions concluded since
the outbreak of war.

Article 48. Pending the complete abolition of the system
of prohibition accompanied by licences, licences should be
granted on conditions which are publicly announced, unam-
biguously stated and uniformly applicable. Any trader should
accordingly be in a position easily to estimate in advance
whether and under what conditions a licence is procurable.
Administration should be on the simplest lines possible, and
every arrangement should be made to secure that applications
for licences are dealt with expeditiously by competent bodies
organized for the purpose. In the grant of licences there
should be no discrimination of any kind in respect of the
nationality of the importer, the origin of the goods or their
nature, nor should the grant be dependent on the prices at
which they are to be purchased.

Article 49. Similar provisions mutatis mutandis to those
laid down in Articles 46 to 48 should be applied in regard to
any restriction of exportation which any Government may
find necessary for national security, or for the purpose of con-
serving its economic resources ; the licensing system should
be such as to allow of no discrimination in regard to the prices
at which the goods are to be disposed of.

23

354 The Genoa Conference

C. — GENERAL.

Article 50. — Where the admission or transit of goods of
any description into any country or the duties leviable thereon
are dependent on the fulfilment of particular technical con-
ditions with regard, for instance, to their constitution, their
purity, their district of origin, their sanitary condition, the
Governments should come to arrangements with each other
providing for the acceptance in accordance with rules and
principles mutually agreed of certificates issued by competent
scientific institutions or recognized authorities or bodies in
the country of origin of the goods.

Article 51. The necessary steps should be taken to secure
that the preceding provisions should be observed in the
letter and in the spirit by all Government authorities, central
or local, and that no regulations of an administrative character
shall be issued which would conflict therewith.

Article 52. It is desirable to arrange for inquiry to be made
from time to time through a suitable organization, e.g., the
League of Nations, into the progress made by the various
States in carrying these principles into operation.

Article 53. All the Governments concerned should inform
immediately the organization referred to in Article 52 of all
changes in customs tariffs, or in the regulations relating to
prohibition or restriction of imports or exports.

NOTE i. — In addition to the provisions contained in
Articles 41-53, a suggestion was considered that resolutions
should be submitted to the Genoa Conference for accept-
ance providing during a certain period for the mutual
accord to each other by all the nations represented of the
treatment of the most-favoured nation in customs matters,
subject to certain reservations which would be necessary
to meet special difficulties. Whilst it was generally recog-
nized that on purely economic grounds some such provision
could be welcomed in the present general situation, some of
the experts did not feel able to accept the proposals as
presented.

Appendix III 355

NOTE 2. — The experts have also considered the question
of facilitating the use of arbitration clauses in commercial
contracts relating to foreign business. They agreed that
the question was one calling for careful consideration, but
in view particularly of its technical and legal aspects, they
were of opinion that further investigation of the subject
was necessary before a resolution could be prepared for
submission to the Genoa Conference.

CHAPTER III

PROTECTION OF INDUSTRIAL PROPERTY AND COPYRIGHTS

Article 56. It is desirable that all European States which
have not already done so should at once take steps to adhere
to the International Convention of Paris of March 20th, 1883,
as revised at Washington in 1911, for the protection of in-
dustrial property, and to the International Convention of Berne
of September gth, 1886, revised at Berlin on November I3th,
1908, and completed by the Additional Protocol signed at
Berne on March 20th, 1914, for the Protection of Literary and
Artistic Work.

Article 57. Pending such adhesion every European State
should, in so far as Industrial, Literary and Artistic property
is not now reciprocally protected as between itself and other
States, give effective protection to such property on condition
of reciprocity ; and should further — save in so far as such
rights have been or shall be dealt with by the Treaties of
Peace with Germany, Austria, Hungary, Bulgaria and Turkey
— recognize, restore and protect all rights in such property
belonging to the nationals of other States which would now be
in force in its territory, but for any exceptional legislative or
administrative action taken in consequence of war or revolution
between August ist, 1914, and the present da';e.

NOTE. — In the opinion of some of the experts it is highly
desirable that any European State which is not already a
party thereto should adhere to the Arrangement signed at
Madrid on April I4th, 1891, for the repression of false
indications of origin.

23*

350 The Genoa Conference

SECTION III

TRANSPORT SECTION

Article 58. Efficient transport is an essential requisite for
the revival of production and trade. It is therefore desirable
that States should continue to devote their unremitting
efforts to the restoration and improvement of the organization
of their railways, harbours and other means of communi-
cation ; where necessary, surveys of requirements should be
made under adequate expert direction, and where the present
resources of any State appear to be inadequate to restore the
equipment and structure of these undertakings, including the
fuel supply, steps should be taken without delay to secure
assistance, whether from the International Corporation when
established or from other suitable sources.

Article 59. The principles of the Agreement for the Regula-
tion of International Railway Traffic signed at Porto Rosa on
November 23rd, 1921, should immediately be applied to all the
European States represented at Genoa. The Council of the
League of Nations should be invited to inquire into the
measures already taken to carry the Porto Rosa Agreement
and Recommendations into effect.

Article 60. It is desirable that representatives of the railway
administrations of the States concerned should attend a
conference to define what further steps are necessary to restore
international traffic conditions at least as satisfactory as those
existing before the War, and should agree upon recommen-
dations to their governments. Similar conferences should be
held in regard to water communications and harbours.

It is desirable that favourable consideration should be given
to the recommendations of these conferences with a view to
their immediate application, or if necessary to the conclusion
as early as possible of conventions to give effect to them.

Article 61. The conditions of international transport should
not be determined by political considerations but rather by
commercial and technical considerations, as in the case of

Appendix III 857

the Conventions concluded at Barcelona on April 20th, 1921,
regarding Freedom of Transit and the Regime of Navigable
Waterways of International Concern, together with the
additional Protocol to the latter Convention, and the Recom-
mendations relative to the International Regime of Railways.
It is desirable that the various other conventions provided for
in treaties now in force should be prepared and put into
operation as soon as possible.

APPENDIX IV

THE RUSSO-GERMAN TREATY AND THE TREATY OF VERSAILLES

Showing the incompatibility of these the Temps wrote on
April 2ist :

" Le traite germano-bolcheviste contrevient a 1' article
260 du traite de Versailles, et par consequent aussi a
1'article 236. Mais ces deux stipulations, toutes deux
relatives aux reparations, ne sont pas les seules que
I'Allemagne et les Soviets ont omis de respecter. On
peut citer, notamment, deux autres violations.

" Dans le radiotelegramme qui a ete adresse le 17 avril
de Genes a Moscou, et qui relate la signature du traite
germano-bolcheviste, le service de propagande sovietique
definit tres clairement Tun des effets du nouveau traite :
' La Russie, mande-t-il, se dedit des exigences imposees
a I'Allemagne par le traite de Versailles.' Ces ' exigences '
comprennent particulierement le troisieme alinea de
1'article 116 : ' Les puissances alliees et associees reservent
expressement les droits de la Russie a obtenir de 1'Alle-
magne toutes restitutions et reparations basees sur les
principes du present traite.' Or, il est inadmissible que
I'Allemagne, apres avoir pris envers les allies 1' engage-
ment exprime par 1'alinea 3 de 1'article 116, se fasse
exempter de cet engagement par un traite separe avec
les Soviets. Cette fraude est d'autant plus inexcusable
que le gouvernement sovietique, n'etant pas reconnu
par les allies, n'est pas qualifie pour renoncer aux droits
que ceux-ci ont voulu assurer au peuple russe, et qu'il
n'est pas qualifie davantage pour renoncer aux droits
que feraient valoir, en vertu de 1'article 116, les Etats
nouveaux dont le territoire a ete ravage par les armees
allemandes, alors que ce territoire faisait encore partie
de la Russie.

358

Appendix IV 359

" Autre violation du trait6 de Versailles : a 1'article
premier, paragraphe c, du traite germano-bolcheviste,
on lit : ' Le gouvernement russe renonce au rembourse-
ment des sommes que 1'Allemagne a tirees de la vente
du materiel de 1'armee russe transported en Allemagne.'
Par ce texte vraiment audacieux, 1'Allemagne avoue
qu'elle a vendu — apres la guerre, evidemment, car pendant
la guerre elle en avait besoin — le materiel de guerre
qu'elle avait pris aux armees russes. Or, 1'article 169
du traite de Versailles oblige 1' Allemagne a livrer aux
allies, dans les deux mois qui suivront la mise en vigueur
du traite, ' les armes, les munitions et le materiel de
guerre provenant de 1'etranger, y compris le materiel de
defense contre aeronefs, en quelque etat qu'ils se trouvent.'
Si le materiel de guerre russe a ete vendu, comme le
reconnait le gouvernement allemand, est-il tolerable que
ce manquement commis par 1'Allemagne se traduise,
pour elle, par un benefice pecuniaire que les Soviets
1'autoriseraient a conserver ? "

APPENDIX V

REPORT OF THE FINANCIAL COMMISSION

(II)

INTRODUCTION

The Second Commission, which was appointed by the
Conference to deal with financial subjects, met on the nth of
April, 1922, at 4 p.m., and appointed a Sub-Commission to
consider the proposals in regard to Currency. At the second
meeting, held on the I3th of April, a second Sub-Commission
was appointed on Credits, and a third Sub-Commission on
Exchange.

The Currency Sub-Commission held a preliminary meeting
on the I2th of April, and at a second meeting on the I3th of
April decided to constitute a Committee of Experts to consider
the matters referred to it.

The Report of the Committee of Experts (Annex A) was
received on the I7th of April.

The Exchange Sub-Commission met on the I7th of April,
and decided to refer the proposals before it to the Committee
of Experts which had been dealing with Currency.

The further Report of the Committee of Experts in regard
to Exchange (Annex B) was received on the igth of April,
and the two reports were then considered at a joint meeting
of the Sub-Commissions on Currency and Exchange.

The reports were adopted, and the resolutions framed by
the Committee of Experts were recommended by the Sub-
Commissions, with modifications, for adoption. (Resolutions
i to n, and 14 and 15 below.)

A further resolution (Resolution 12), relative to the steps
to be taken to call a meeting of central banks and banks
regulating credit policy in the several countries, was recom-
mended by the Sub-Commission on Currency.

360

Appendix V 861

The recommendations of the Sub-Commissions on Currency
and Exchange were adopted by the Commission at a meeting
held on the 20th of April.

The Sub-Commission on Credits held meetings on the 24th
of April and 26th of April, and recommended four resolutions
(Resolutions 16 to 19), which were adopted by the Commis-
sion at a meeting on the 29th of April.

The nineteen resolutions there adopted are now recom-
mended to the Conference for adoption.

I.— CURRENCY

RESOLUTION i

" The essential requisite for the economic reconstruction
of Europe is the achievement by each country of stability in
the value of its currency."

RESOLUTION 2

" Banks, and especially banks of issue, should be free from
political pressure, and should be conducted solely on lines
of prudent finance. In countries where there is no central
bank of issue, one should be established."

RESOLUTION 3

" Measures of currency reform will be facilitated if the
practice of continuous co-operation among central banks of
issue, or banks regulating credit policy in the several countries
can be developed. Such co-operation of central banks, not
necessarily confined to Europe, would provide opportunities
of co-ordinating their policy, without hampering the freedom
of the several banks. It is suggested that an early meeting
of representatives of central banks should be held with a
view to considering how best to give effect to this recom-
mendation."

RESOLUTION 4

"It is desirable that all European currencies should be
based upon a common standard."

362 The Genoa Conference

RESOLUTION 5

" Gold is the only common standard which all European
countries could at present agree to adopt."

RESOLUTION 6

" It is in the general interest that European Governments
should declare now that the establishment of a gold standard
is their ultimate object, and should agree on the programme
by way of which they intend to achieve it."

RESOLUTION 7

" So long as there is a deficiency in the annual budget
of the State which is met by the creation of fiduciary money
or bank credits, no currency reform is possible, and no approach
to the establishment of the gold standard can be made. The
most important reform of all must therefore be the balancing
of the annual expenditure of the State without the creation
of fresh credits unrepresented by new assets. The balancing
of the budget requires adequate taxation, but if Government
expenditure is so high as to drive taxation to a point beyond
what can be paid out of the income of the country, the taxa-
tion itself may still lead to inflation. Reduction of Govern-
ment expenditure is the true remedy. The balancing of the
budget will go far to remedy an adverse balance of external
payment, by reducing internal consumption. But it is
recognized that in the case of some countries the adverse
balance is such as to render the attainment of equilibrium in
the budget difficult without the assistance in addition of an
external loan. Without such a loan, that comparative
stability in the currency upon which balancing of the budget
by the means indicated above largely depends may be un-
attainable."

RESOLUTION 8

" The next step will be to determine and fix the gold value
of the monetary unit. This step can only be taken in each

Appendix V 363

country when the economic circumstances permit ; for the
country will then have to decide the question, whether to
adopt the old gold parity or a new parity approximating to
the exchange value of the monetary unit at the time."

RESOLUTION 9

" These steps might by themselves suffice to establish a
gold standard, but its successful maintenance would be
materially promoted, not only by the proposed collaboration
of central banks, but by an international Convention to be
adopted at a suitable time. The purpose of the Convention
would be to centralize and co-ordinate the demand for gold,
and so to avoid those wide fluctuations in the purchasing power
of gold, which might otherwise result from the simultaneous
and competitive efforts of a number of countries to secure
metallic reserves. The Convention should embody some
means of economizing the use of gold by maintaining reserves
in the form of foreign balances, such, for example, as the gold
exchange standard, or an international clearing system."

RESOLUTION 10

" It is not essential that the membership of the international
Convention contemplated in the preceding resolution should be
universal, even in Europe, but the wider it is, the greater will
be the prospect of success.

" Nevertheless, if the participating countries and the United
States are to use the same monetary standard, no scheme for
stabilizing the purchasing power of the monetary unit can be
fully effective without co-ordination of policy between Europe
and the United States, whose co-operation therefore should be
invited."

RESOLUTION n

"It is desirable that the following proposals to form the
basis of the international Convention contemplated in Reso-
lution 9 be submitted for the consideration of the meeting of
central banks suggested in Resolution 3 :

" i. The Governments of the participating countries declare

804 The Genoa Conference

that the restoration of a gold standard is their ultimate object,
and they agree to carry out, as rapidly as may be in their
power, the following programme :

" (a) In order to gain effective control of its own currency,
each Government must meet its annual expenditure without
resorting to the creation of fiduciary money or credits for the
purpose.

" (b) The next step will be, as soon as the economic circum-
stances permit, to determine and fix the gold value of the
monetary unit. This will not necessarily be at the former
gold par.

" (c) The gold value so fixed must then be made effective
in a free exchange market.

" (d) The maintenance of the currency at its gold value
must be assured by the provision of an adequate reserve of
approved assets, not necessarily gold.

"2. When progress permits, certain of the participating
countries will establish a free market in gold and thus become
gold centres.

" 3. A participating country, in addition to any gold
reserves held at home, may maintain in any other partici-
pating country reserves of approved assets in the form of bank
balances, bills, short term securities or other suitable liquid
resources.

"4. The ordinary practice of a participating country will
be to buy and sell exchange on other participating countries
within a prescribed fraction of parity, in exchange for its own
currency on demand.

"5. The Convention will thus be based on a gold exchange
standard. The condition of continuing membership will be
the maintenance of the national currency unit at the pre-
scribed value. Failure in this respect will entail suspension
of the right to hold the reserve balances of other participating
countries.

"6. Each country will be responsible for the necessary
legislative and other measures required to maintain the inter-
national value of its currency at par, and will be left entirely

Appendix V 865

free to devise and apply the means, whether through regulation
of credit by central banks or otherwise.

" 7. Credit will be regulated, not only with a view to main-
taining the currencies at par with one another, but also with a
view to preventing undue fluctuations in the purchasing power
of gold. It is not contemplated, however, that the discretion
of the central banks should be fettered by any definite rules
framed for this purpose, but that their collaboration will have
been assured in matters outside the province of the partici-
pating countries."

RESOLUTION 12

" With a view to the development of the practice of con-
tinuous co-operation among central banks and banks re-
gulating credit policy in the several countries, as recommended
in Resolution 3, this Conference recommends that the Bank of
England be requested to call a meeting of such banks as soon
as possible to consider the proposals adopted by the Con-
ference, and to make recommendations to their respective
Governments for the adoption of an International Monetary
Convention."

II.— THE FLIGHT OF CAPITAL

RESOLUTION 13

" We have considered what action, if any, could be taken to
prevent the flight of capital in order to avoid taxation, and we
are of the opinion that any proposals to interfere with the
freedom of the market for exchange, or to violate the secrecy
of bankers' relations with their customers are to be condemned.
Subject to this proviso, we are of the opinion that the question
of measures for international co-operation to prevent tax
evasion might be usefully studied in connection with the
problem of double taxation which is now being studied by a
Committee of Experts on behalf of the League of Nations.
We therefore suggest that the League should be invited to
consider it."

866 The Genoa Conference

III.— EXCHANGE

RESOLUTION 14

" All artificial control of operations in exchange, whether
by requiring a licence for transactions in exchange, or by
limiting the rates at which transactions may be effected, or by
discriminating between the different purposes for which the
exchange may be required, or by preventing free dealings in
forward exchange is futile and mischievous, and should be
abolished at the earliest possible date."

RESOLUTION 15

" It is desirable that, where no adequately organized market
in forward exchange exists, such a market should be estab-
lished. It has been suggested that, in any country where
private enterprise is found to be unable to organize such a
market, the central bank, without itself incurring any un-
covered exchange risk, should provide facilities. It might, for
example, give facilities to approved banks and financial houses
to convert spot transactions in foreign exchange into trans-
actions for forward delivery by a system of ' contango,' or
' reports ' of foreign exchange, their quotations being for
the double transaction of a spot deal one way and a simul-
taneous forward deal the other.

" The central banks concerned would agree to provide
facilities for holding foreign balances (and securities) on de-
posit on account of other central banks, under special gua-
rantees from each bank and from its Government as to the
absolute liquidity and freedom of movement of such balances
under all conditions, and their absolute exemption from
taxation, forced loans and moratorium.

" It is recommended that this subject should be considered
by the Conference of central banks referred to in a previous
Resolution."

IV.— CREDITS
RESOLUTION 16

" The reconstruction of Europe depends on the restoration
of conditions under which private credits, and in particular

Appendix V 367

investible capital, will flow freely from countries where there
is surplus lending capacity to countries which are in need of
external assistance.

" Loans from Government to Government ought to be
resorted to, if at all, only in the most exceptional cases. The
free flow of private credits and of investible capital depends
upon the taking of adequate measures by all countries to restore
order to their public finances and their currencies, and the
furnishing by borrowing countries of guarantees satisfactory
to lenders. Special machinery is necessary during the present
transitional period to start the flow and to enable the co-
operation of the financially stronger countries to begin to be
immediately effective."

RESOLUTION 17

"It is essential that countries in need of credits should
undertake to give effect to the best of their ability to the reso-
lutions regarding currency and exchanges already adopted.

" Proof of serious efforts to improve the condition of its
public finances will be the best guarantee which a borrowing
country can offer to prospective lenders. The steps required
for re-establishing the disordered currencies of Europe have
already been set out. In arriving at a balanced budget atten-
tion should be concentrated on the following main points :

" (a] Ordinary revenue and expenditure should be equalized
by reducing expenditure and, in so far as this is not possible, by
increasing revenue.

" (b) All expenditure of an extraordinary character should
be progressively reduced until it is entirely abolished, and
should not be met out of borrowed money unless it is clearly
of the nature of new capital expenditure for productive pur-
poses. In so far as borrowing is resorted to, long term loans
are preferable to short terms, and in no case should methods be
adopted which lead directly or indirectly to inflation."

RESOLUTION 18

" Full information is essential to the creation and main-
tenance of confidence. Each country should undertake the

368 The Genoa Conference

publication of frequent and complete statements of the con-
dition of its public finances. It will be useful that such state-
ments should be regularly supplied to the League of Nations
and that the League of Nations should continue to compile and
issue periodical volumes based on returns from as many
countries as possible, whether members of the League or not."

RESOLUTION 19

" In order to facilitate the immediate co-operation of the
nationals of the economically stronger countries for purposes
of reconstruction, it is recommended that as many as possible
of the Governments represented at the Genoa Conference
should agree to support the establishment and facilitate the
operations of an International Corporation and of national
corporations affiliated to it in countries where adequate
security offers, whether by the provision of private loans or
credits or, where necessary, in the form of loans to Govern-
ments, whose main object would be to examine the opportu-
nities for undertaking work in connection with European re-
construction, to assist in the financing of such undertakings,
and to co-operate with other agencies and undertakings, with-
out attempting to create any monopoly.

ANNEXES
REPORTS OF THE COMMITTEE OF EXPERTS

APPOINTED BY THE CURRENCY AND EXCHANGE SUB-COMMIS-
SIONS OF THE FINANCIAL COMMISSION

ANNEX A.— CURRENCY

" We have carefully examined the documents referred to
us by the Currency Sub-Commission, and in doing so, we have
surveyed the existing currency situation throughout Europe.
Our conclusions follow to a considerable extent those of the
experts assembled in London. The interesting suggestions
made by the various delegations have also been fully weighed,
and we believe that the main points raised by them are covered
by our report.

Appendix V 869

" In presenting our report we desire to make the following
general observations :

" i. We recognise that we have to deal with two different
classes of countries :

" Class i. Countries where inflation has taken place, but
has already been stopped, and where a certain amount of
deflation has already been effected.

" Class 2. Countries where inflation is still going on.

" In countries of Class 2 it is essential, in order to establish a
sound currency, that inflation should be stopped, and that
they should thus pass over into Class i. The programme
specified in Resolutions 6 to 8 describes the steps by which
this transition should be effected. In some cases it cannot be
effected without assistance from abroad, including the pro-
vision of foreign assistance in the organization of a central
bank of issue in certain cases.

" 2. The question of devaluation is one which must be
decided upon by each country according to its view of its
own special requirements. We think it important however
to draw attention to some of the considerations which will
necessarily weigh with any country in coming to a decision on
this question. There is a prevalent belief that a return to
pre-war gold parity is necessary or desirable for its own sake.
There are undoubted advantages to be obtained by such a
return, but we desire to point out that for countries where
currency has fallen very far below the pre-war parity, a re-
turn to it must involve the social and economic dislocation
attendant upon continuing readjustments of money-wages
and prices, and a continual increase in the burden of internal
debt. Regard being had to the very large debts which
have been incurred since the Armistice by many of the
countries concerned, we are inclined to think that a return to
the old gold parity involves too heavy a strain upon produc-
tion. We repeat that the decision must be left in each case to
the country concerned, but we venture to suggest that a con-
siderable service will be rendered both to its own internal
economy and to the cause of European recovery by that

24

370 The Genoa Conference

country which, after reaching comparative stability in its
currency at a point so far below the old parity as to make
return to it a long and painful process, first decides boldly to set
the example of securing immediate stability in terms of gold
by fixing a new gold par at or near the figures at which
comparative stability has been obtained.

"3. Finally, we cannot in fairness to the Currency Sub-
Commission present a series of recommendations designed to
secure practical results, as if they were immediately attainable,
without reference to certain other features of the existing
economic and financial position of Europe. The industry of
Europe cannot hope for a permanent return to prosperity so
long as it has to bear, either directly in the form of taxation,
or indirectly in the form of inflation of currencies, the most
insidious and objectionable of all forms of taxation, a burden
of Government expenditure which is beyond its capacity. In
this connection we cannot do better than refer to the memorial
on International Finance and Currency submitted to the
Governments of certain countries, dated January i6th, 1920,
which was among the documents laid before the International
Financial Conference at Brussels of September, 1920. The
whole of this memorial, though now more than two years old,
is as apposite to-day as when it was written, and until the
subjects to which it refers, and in particular the problem
of Inter-Governmental indebtedness, have been resolutely
tackled, there can be no hope of final success in restoring the
currencies or the economic welfare of Europe. Foreign obli-
gations by one country must be balanced by a capacity in other
countries to absorb the surplus production with which alone
those obligations can be met. If the burden of any country's
external obligations is beyond its capacity to pay, and it
cannot be assisted by foreign loans, the effort to meet those
obligations must accordingly result on the one hand in dislo-
cation of markets in other countries, and on the other hand in
a continuous depreciation of the currency of the debtor country,
which will entirely prevent it from making any start whatever
in the direction of stabilization.

Appendix V 371

"4. With these preliminary observations we present the
following resolutions,* which we suggest as suitable to be
recommended by the Currency Sub-Commission, for adoption
by the Governments represented at this Conference. It will
be observed that the recommendations include a plan for an
International Monetary Convention."

ANNEX B.— EXCHANGE

" We present the following resolutions! as suitable to be
recommended by the Exchange Sub-Commission for adoption
by the Governments represented at this Conference. Our
main recommendation is that there should be complete free-
dom for exchange dealings. We have not attempted to set
out the deep-seated causes of the existing dislocation of the
European exchanges. Some of these causes are referred to
in the introduction to our Report to the Currency Sub-Com-
mission. Any attempt at a complete survey would carry us
far beyond the proper limits of the present report. As with
currency, so with exchange, complete restoration depends on
the settlement of questions which are not now within our
purview.

' We considered carefully the amendment proposed by the
German Delegation with regard to measures for preventing
the flight of capital for the purpose of evading taxation. We
came to the conclusion that this question should be regarded
as falling within the province of the Currency Sub-Commission.
We have therefore reported to the Currency Sub-Commission
as follows :

" ' Any proposals to interfere with the freedom of the market
for exchange or to violate the secrecy of bankers' relations
with their customers are, in our opinion, absolutely to be
condemned. Subject to this proviso, we are of opinion that

* The resolutions submitted were those which, with modifications,
have been adopted above by the Financial Commission. See Resolutions
i to ii.

f The resolutions submitted were those which, with modifications,
have been adopted above by the Financial Commission. See Resolutions
14 and 15.

872 The Genoa Conference

the question of measures for international co-operation to
prevent tax evasion might be usefully studied in connection
with the problem of double taxation, which is now being
studied by a Committee of Experts on behalf of the League of
Nations. We therefore suggest that the League should be
invited to consider it.'"

Signed by :

SIR BASIL BLACKETT.

PROF. CASSEL.

DR. HAVENSTEIN.

DR. VlSSERING.
M. AVENOL.

SIR HENRY STRAKOSCH.
M. DUBOIS.

COMM. BlANCHINI.

HON. R. H. BRAND.

M. Cattier and Dr. Pospisil were unable to attend the experts'
meetings.

APPENDIX VI
REPORT OF THE TRANSPORT COMMISSION

" Genoa, 30th April, 1922.

" Gentlemen, — The Transport Commission entrusted by
the International Economic Conference with the task of
examining the questions relating to the restoration of means
of communication, concluded its task on April 26th, 1922.
Its deliberations, carried on in a spirit of complete harmony
and close co-operation, have led to the adoption, with practical
unanimity, of the following Draft Resolution. In the pre-
paration of this Draft Resolution account has equally been
taken of the views expressed by the Delegates of Powers
not represented on the three Sub-Commissions set up by the
Transport Commission; that is to say, the Organizing Sub-
Commission, the Railways Sub-Commission and the Waterways
Sub-Commission."

DRAFT RESOLUTION

" PREAMBLE. — Efficient transport is an essential requisite
for the revival of European trade, and it is therefore desirable
that the European States should continue to devote their
unremitting efforts to the restoration of all means of transport
at their disposal, and to the removal of every obstacle affecting
international communications. It is essential also that the
conditions of international transport should be determined
solely by commercial and technical considerations.

" Article I. All European States should maintain their
efforts to restore or improve the organization of their railways,
their ports and their maritime and fluvial means of communi-
cation. If these railways, ports or means of communication
are not in a satisfactory condition, and if the State concerned
has not at its disposal the necessary resources to secure their

373

874 The Genoa Conference

restoration, steps should be taken without delay to procure
for it the necessary assistance. To this end, it is desirable
that States which are in need of assistance should organize
surveys with the aid of competent experts.

" Article 2. It is desirable that all the European States
signatory of the Conventions concluded at Barcelona on the
2oth April, 1921, regarding Freedom of Transit and the Re-
gime of Navigable Waterways of International Concern (see
Summary of the Conventions, in Annex i), should ratify
these Conventions at the earliest possible moment, if they have
not already done so, and that the European States which are
neither signatories of these Conventions nor parties thereto
should put their provisions into operation without delay.

" Article 3. The European States represented at Genoa
note with satisfaction the work accomplished at Barcelona
in regard to the regime of international ports (see Summary
of the Recommendations in Annex i). They deem it desirable
that the Conventions relating to Ports, Railways and Water-
ways contemplated by the Treaties of Peace should be pre-
pared and put into operation as soon as possible, and they
deem it equally desirable that the recommendations of the
Conference of Barcelona regarding the international regime
of railways should be put into operation without delay (see
Summary of the Recommendations in Annex i).

" Article 4. Pending the conclusion of the new Convention
relating to the transport by rail of passengers, luggage and
goods, the European States whose railways were subject
to the regime of the Berne Convention should undertake
to put this Convention into force without delay, if it is not
already in force.

" Article 5. The Conference notes with satisfaction the
assurance given by all the States signatory of the Agreements
for the regulation of international railway traffic concluded
at Porto Rosa on November 23rd, 1921 (see Annex 2), that
they have put, or are putting, the said Agreements effectively
into operation. The European States not signatory to these
Agreements likewise accept their general principles, with a

Appendix VI 875

view to putting them into operation with the least possible
delay, in so far as they are applicable to them.

" Article 6. Without prejudice to the foregoing provisions,
and in order that all possible steps may be taken without
delay to restore international traffic to a condition at least
as satisfactory as that existing before the war, the States
represented at Genoa recommend that the various French
Railway Administrations should convoke at the earliest
possible moment a conference of technical representatives of
all the railway administrations of Europe and of the countries
interested, so that :

" (i) These administrations may put into operation im-
mediately all measures to this end which are within their
competence and

" (2) The representatives of the administrations may
agree upon proposals to their respective Governments for such
further action as may require governmental intervention.

" At this meeting, which should especially endeavour to
establish between the administrations concerned the closest
possible collaboration, without sacrificing in any degree the
autonomy of the several lines, and without trenching upon the
functions of existing international associations, the technical
representatives should examine, among other questions, the
creation of a permanent conference of railway administrations
for the assimilation and improvement of the equipment and
operating methods of the railways, with a view to international
traffic.

" Among the principal items on the agenda of this conference
shall be the question of through tariffs and the mitigation of
the impediments to international transport occasioned by
exchange fluctuations.

" Article 7. Seeing that the restoration of railways and
waterways will take a certain time, the Commission recommends
that services of motor transport should be established pro-
visionally in cases where it may be practicable and desirable.

" Article 8. It is desirable that the competent Technical
Organizations of the League of Nations, with the addition of

sre The Genoa Conference

one representative of any State which is not a member of the
League, in cases in which such State may be interested, should
be invited :

" To examine from time to time the progress achieved
in carrying into effect the provisions set forth in the preceding
Articles, and

" To this end to summon, with the consent of the States
concerned, special conferences of experts.

" Nevertheless, the powers of the Permanent Commissions
on Ports and Navigable Waterways of International Concern
shall not be prejudiced."

" This draft Resolution was adopted by the Transport
Commission, which took note of the following reservations
and observations made by various delegations.

" The Lithuanian Delegation formulated a reservation in
respect of the Preamble. In regard to that part of the Preamble
where it was stated that, ' it is essential also that the con-
ditions of international transport should be determined solely
by commercial and technical considerations,' the Lithuanian
Delegation declared that, while they fully recognized the
general necessity of this principle, they found themselves
unable to apply it as regards Poland, on account of the situation
created by the events at Vilna.

" The Transport Commission regarded this reservation
as being founded on political considerations, and was therefore
incompetent to examine it. The Commission also considered
that it rested entirely with the Lithuanian Delegation to
apprise the Political Commission, should occasion arise, of
the reservation.

" The Netherlands Delegation formulated a reservation
upon Article 2, considering that it rested with the competent
constitutional authorities in each country to pronounce upon
the advisability of putting the work of Barcelona into practice,
and that the Delegation must abstain from pronouncing upon
the intrinsic value of these Conventions, on the ground that
the Genoa Conference could neither examine nor discuss them.

Appendix VI 87T

" The Swiss Delegation declared that they did not make
their adherence absolutely dependent on that of the Nether-
lands Government ; but they thought it proper to state that
the Federal Government had felt itself unable up to the present
to accept the Convention of Barcelona on Navigable Water-
ways because certain Articles of this Convention did not give
it complete satisfaction. The Federal Government, however,
was continuing to examine this question with all the attention
that it deserved, and with the aim of collaborating in the work
of furthering the general interest in the matter of international
transport.

" The French Delegation had associated itself with the
recommendation that the Convention of Barcelona relating
to Navigable Waterways should be ratified by all the European
States, but declared that the French Government might find
itself unable to ratify this Convention if two other riparian
States of the Rhine, the Netherlands and Switzerland, were
not prepared to accept it.

" The Portuguese Delegation declared that the Barcelona
Conventions had not yet been ratified by the Portuguese
Government because it had not yet received the information
called for from the Portuguese Colonies, which might allow
it to proceed to ratification.

" Its ratification would, however, in any case be subject
to the reservations made by the Portuguese delegate at Barce-
lona itself.

" Further, the Portuguese Delegation made a reservation
on the subject of the Agreements of Porto Rosa mentioned
in Article 5, inasmuch as these Agreements had not yet been
brought to the knowledge of the Portuguese Government.
It was hoped, however, to withdraw this reservation when the
opportunity arose to take cognizance of these Agreements.

" The Rumanian Delegation declared that its Government
would ratify the Convention of Barcelona on Navigable Water-
ways, but with the reservation that no change should, as a
result, be admitted in the provisions of the Convention
establishing the definitive Statute of the Danube. The same

878 The Genoa Conference

delegation observed with regard to the words ' general
principles ' contained in Article 5, that the ratification by
Rumania of the Agreements mentioned in that Article could
only take place on condition that all the European States
should apply and bring into operation the principles of these
Agreements.

" The Russian Delegation presented a provisional reser-
vation on the subject of Articles 2 and 3, where mention was
made of the Conventions of Barcelona, Conventions which
the Russian Delegation had not yet had time to examine in
detail. Further, the Russian Delegation made a reservation
on Article 3, where mention was made of the Treaties of Peace,
to which Russia is not a party, and which have not been
brought officially to her notice.

" Following on an observation made by the British Dele-
gation it is understood that the Conference referred to in
Article 6 does not prejudice the preparation of the Conventions
which are to be concluded in virtue of Articles 366 and 379 of
the Treaty of Versailles and the corresponding Articles of the
other Peace Treaties.

" The German Delegation made a declaration to the effect
that, in view of the fact that the Treaties of Peace are excluded
entirely from discussion as a consequence of the decisions
taken at Cannes, they could make no statement on the portion
of Article 3 relating thereto.

" With regard to Article 6, the German Delegation gave
expression, in an amendment which they deposited and
which is annexed to the official proces-verbal of the meetings,
to their own views as to the programme of work of the
Conference mentioned in Article 6.

" Finally, the German Delegation asked that the following
wording should be substituted for the text of Article 8 :

' ' ' Whenever it appears proper that the Governments
concerned should examine the progress achieved in putting
into operation the provisions contemplated in the preceding
Articles, meetings shall take place at Geneva on a basis of
complete equality, in order that it may be possible to have

Appendix VI 379

the benefit of the Technical Organizations of the League of
Nations.'

" The Hungarian Delegation presented a memorandum in
considerable detail upon the railway situation in Hungary,
which is anexed to the official proces-verbal of the meetings.

" Some of the wishes expressed by the Hungarian Dele-
gation have been met by incorporation in the text of the draft
resolution itself.

" As regards the other questions raised in this Memorandum
their technical character calls for a detailed examination,
which should be entrusted to the Conference provided for in
Article 6.

" The Hungarian Delegation also declared that they accepted
the text of Article 8 on condition that it be understood that the
representatives of the States concerned which were not members
of the League of Nations, but which might be associated with
the Technical Organizations of the League of Nations by the
operation of Article 8, should stand upon a footing of complete
equality with the representatives of States Members of the
League of Nations. The Transport Commission confirmed
this interpretation."

" The Transport Commission has the honour to propose to
you that the text of the draft resolution above recited be
approved.

" For the President of the Transport Commission,
(Signed) " H. JASPAR."

880 The Genoa Conference

ANNEX I

SUMMARY OF THE CONVENTIONS AND RECOMMENDATIONS

ADOPTED BY THE

FIRST GENERAL CONFERENCE ON COMMUNICATIONS AND

TRANSIT OF THE LEAGUE OF NATIONS HELD AT BARCELONA

IOTH MARCH — 20TH APRIL, 1921*

I. — CONVENTION AND STATUTE ON FREEDOM OF TRANSIT.

" The Convention begins by giving a definition of transit,
as also of the various categories of transport to which it applies.
Persons, baggage and goods and also vessels, coaches and goods
stock, and other means of transport are deemed to be in transit
across territory under the sovereignty or authority of a Con-
tracting State, when the passage across this territory is only
a portion of a complete journey, beginning and terminating
beyond the frontier of that State.

" Subject to certain exceptions and restrictions detailed
further in the text, all the Contracting States undertake to
facilitate freedom of transit as above defined in respect of
traffic across their territory, whether by rail or waterway.
The Convention does not apply to traffic other than that by
rail or waterway.

" In order that this freedom of transit may be assured, it
is understood that no distinction may be made which is based
on the nationality of persons, the flag of vessels, the place of
origin, departure, entry, exit or destination, or on any cir-
cumstance relating to the ownership of goods or of vessels,
coaches or goods stock, or other means of transport.

" In order to ensure the application of the provisions with
regard to the granting of freedom of transit without distinction,
Contracting States will also allow transit across their terri-
torial waterways, in accordance with the customary conditions
and reservations.

* This summary, which necessarily leaves aside many of the details and
precise stipulations, can only be considered as giving an approximate
idea of the texts referred to. The document was prepared under the
direction of M. Attolico, Under-Secretary-General of the League of Nations,
and M. Haas, Secretary-General of the Baccelona Conference.

Appendix VI 881

" Traffic in transit must not be subject to any special dues
in respect of transit. The only dues which may be levied are
those intended solely to defray expenses of supervision and
administration entailed by such transit. The rate of any
such dues must correspond as nearly as possible to the ex-
penses which they are intended to cover, and these dues must
be imposed under the conditions of equality laid down above,
subject to a possible reduction or even abolition of dues on
certain rails, on account of differences in the cost of
supervision.

" On routes operated or administered by the State or under
concession, the Contracting States undertake to apply to
traffic in transit, whatever may be its place of departure or
destination, tariffs which are reasonable, having regard to
the conditions of traffic and considerations of commercial
competition between routes. No charges, facilities or restric-
tions shall depend, directly or indirectly, on the nationality
of the vessel or other means of transport on which any part
of the complete journey has been or is to be accomplished.

" In this manner freedom of transit is assured, but certain
extensions, restrictions and explanations are nevertheless
entailed, and these are set forth as follows :

" No Contracting State is bound to afford transit for
passengers whose admission into its territories is forbidden,
or for goods of a kind of which the importation is prohibited
on account either of public health or security, or as a precaution
against diseases of animals or plants. Every Contracting
State is likewise entitled to take reasonable precautions to
ensure that such traffic, which is ostensibly transit traffic, is
really transit traffic, and to prevent the safety of routes and
means of communication being endangered ; as well as to
protect itself against traffic in dangerous drugs, arms, etc.,
in accordance with Article 5 of the Statute.

"Any measures of a general or particular character which a
Contracting State may be obliged to take in case of an
emergency affecting the safety of the State or the vital
interests of the country may, in exceptional cases, and for as

382 The Genoa Conference

short a period as possible, involve a deviation from the
above provisions.

" It is understood that the Convention does not of
itself impose on any of the Contracting States a further
obligation to grant freedom of transit to a non-Contracting
State, except when a valid reason is shown for such transit
by one of the other Contracting States concerned. It is like-
wise understood that the Convention does not prescribe the
rights and duties of belligerents and neutrals in time of war.
It shall, however, continue in force in time of war, so far as
such rights and duties permit.

" The coming into force of the Convention shall not abrogate
treaties, conventions and agreements on questions of transit
concluded before the ist May, 1921. In consideration of such
agreements being kept in force, the Contracting States under-
take, either on the termination of the agreement or when
circumstances permit, to introduce into any agreement so
kept in force, which contravenes the provisions of the Con-
vention, the modifications required to bring it into accord
with such provisions, so far as geographical, economic and
technical circumstances of the countries or areas concerned
allow. Except when geographical, economic or technical
circumstances justify exceptional deviations, the Contracting
States further undertake not to conclude in future treaties,
conventions or agreements which are inconsistent with the
provisions of the Convention.

" Any Contracting State which can establish a good case
against the application of any provision of the Convention
on some or all of its territory, on the ground of the grave
economic situation arising out of the acts of devastation
perpetrated on its soil during the war of 1914-1918, shall be
deemed to be relieved temporarily of the obligations arising
from the application of such provisions.

" Lastly, the Convention does not entail in any way the
withdrawal of facilities which are greater than those provided
for in the Convention, which have been accorded to transit
traffic under conditions consistent with its principles, nor

Appendix VI 888

does it entail any prohibition of such grant of greater facilities
in the future.

" Disputes which may arise as to the interpretation or
application of the Convention, and which are not settled
directly between the parties themselves, shall be brought
before the Permanent Court of International Justice, under
a special agreement or a general arbitration provision. In
order to settle such disputes, however, as far as possible in
a friendly way, the Contracting States undertake, before
resorting to any judicial proceedings, to submit such disputes
for an opinion to the Advisory and Technical Organization
of the League of Nations in matters concerning communica-
tions and transit.

II. — CONVENTION AND STATUTE ON THE REGIME OF NAVI-
GABLE WATERWAYS OF INTERNATIONAL CONCERN

" The following are declared to be navigable waterways of
international concern :

" (a) All parts which are naturally navigable to and from
the sea of a waterway which in its course, naturally navigable
to and from the sea, separates or traverses different States,
and also any part of any other waterway naturally navigable
to and from the sea, which connects with the sea a waterway
naturally navigable which separates or traverses different
States. Any natural waterway or part of a natural waterway
is termed " naturally navigable " if now used for ordinary
commercial navigation, or capable, by reason of its natural
conditions, of being so used.

" In applying the definition, tributaries are to be considered
as separate waterways.

" (b) Waterways or parts of waterways, whether natural or
artificial, expressly declared to be placed under the regime
of the Convention, either in unilateral Acts of the States under
whose sovereignly or authority they are situated, or in agree-
ments made with the consent, in particular, of such States.

" On the navigable waterways thus specified, each of the
Contracting States shall accord the free exercise of navigation

884 The Genoa Conference

to the vessels flying the flag of any one of the other Contract-
ing States. In the exercise of such navigation, the nationals,
property and flags of all the Contracting States shall be treated
in all respects on a footing of perfect equality. No distinction
shall be made between the nationals, the property and the
flags of the different riparian States, including the riparian
State exercising sovereignity or authority over the portion
of the navigable waterway in question ; similarly, no distinc-
tion shall be made between the nationals, the property and
the flags of riparian and non-riparian States.

" Nevertheless, every riparian State has the right of reserv-
ing for its own flag the transport of passengers and goods
loaded at one port situated under its sovereignty or authority,
and unloaded at another port also situated under its sovereignty
or authority. A State which does not reserve the above-
mentioned transport to its own flag may, nevertheless, refuse
the benefit of equality of treatment with regard to such trans-
port to a co-riparian which does reserve it.

" Likewise, when a natural system of navigable waterways
of international concern, which does not include waterways
subject to the jurisdiction of an international Commission
upon which non-riparian States are represented, separates or
traverses two States only, the latter have the right to reserve
to their flags by mutual agreement the transport of passengers
and goods loaded at one port of this system and unloaded at
another port of the same system, subject to certain reserva-
tions. On the navigable waterways of international concern
situated under its sovereignty, each Contracting State main-
tains its existing rights in respect of general policing and
application of laws and regulations relating to customs,
public health, etc., in accordance with Article 6 of the
Statute.

" No dues of any kind may be levied anywhere on the course
or at the mouth of a navigable waterway of international
concern, other than dues in the nature of payment for services
rendered, and intended solely to cover in an equitable manner
the expenses of maintaining and improving the navigability

Appendix VI 385

of the waterway and its approaches, or to meet expenditure
incurred in the interests of navigation.

" Transit on navigable waterways of international concern
is regulated in accordance with the Statute on Freedom of
Transit. In addition, the following special facilities are
provided for :

" Subject to the other provisions of the Statute, the nationals,
property and flags of all the Contracting States shall, in all ports
situated on a navigable waterway of international concern,
enjoy, in all that concerns the use of the port, treatment equal
to that accorded to the nationals, property and flag of the
riparian State under whose sovereignty or authority the port
is situated. In the application of customs of other analogous
duties, local octroi or consumption duties, etc., no difference
shall be made by reason of the flag. In the absence of special
circumstances justifying an exception on the ground of
economic necessities, the customs duties must not be higher
than those levied on the other customs frontiers of the State
interested, on goods of the same kind, source and destination.
Each riparian State is bound to refrain from all measures
likely to prejudice the navigability of the waterway, or to
reduce the facilities for navigation, and to take as rapidly as
possible all necessary steps for removing any obstacles and
dangers to navigation which may arise. If such navigation
necessitates regular upkeep of the waterway, the Convention
lays down the reciprocal duties and obligations of the riparian
States with a view to assuring this upkeep. The Convention
likewise stipulates the conditions under which improvements
are to be carried out where necessary. In the case of navi-
gable waterways of international concern which fall under the
jurisdiction of an International Commission, special provisions
are applicable in respect of works.

" In the absence of any provisions to the contrary contained
in a special agreement or treaty, the administration of navi-
gable waterways of international concern is exercised by each
of the riparian States under whose sovereignty or authority
the navigable waterway is situated. Each of these States

25

386 The Genoa Conference

has the power and duty of publishing regulations for the
navigation of the waterway, and of seeing to their execution.
These regulations must be framed and applied in such a way
as to facilitate the free exercise of navigation. Provision is
also made for measures tending to make these regulations as
far as possible uniform over the whole course of one and more
navigable waterways. If, in virtue of special agreements or
treaties, certain functions have been or shall hereafter be
entrusted to an International Commission which includes
representatives of States other than the riparian States, the
mimimum powers to be accorded in all cases to such Commis-
sions are denned in the Statute.

" The Convention does not prescribe the rights and duties
of belligerents and neutrals in times of war. It shall, however,
continue in force in time of war so far as such rights and duties
permit. In the absence of any agreement to the contrary,
the Convention has no reference to the navigation of vessels
of war, or of vessels performing police or administrative
functions, or in general exercising any kind of public authority.

" In exceptional cases, when an emergency arises which
affects the safety of a State or the vital interests of a country,
a deviation may be made from the provisions of the Con-
vention, it being understood that the principle of the freedom
of navigation, and especially communication between the
riparian States and the sea, must be maintained to the utmost
possible extent.

' The provisions of the Convention on Freedom of Transit
relating to the grant of greater facilities or exemptions on the
ground of the grave economic situation arising out of acts of
devastation perpetrated during the war of 1914-1918, and
also to the settlement of disputes, are likewise stipulated in
the Convention of the International Regime of Navigable
Waterways.

Appendix VI 387

III. — RECOMMENDATIONS RELATIVE TO PORTS PLACED UNDER
AN INTERNATIONAL REGIME

"It is recommended that the following provisions should
be applied to the ports or parts of ports, with or without free
zones, which may be placed under an international regime,
it being well understood that such a regime can only be applied
in consequence of a special act involving the consent of the
State under whose sovereignty or authority the said port
is situated.

" (a) General Provisions. — The nationals, property and
flags of all nations shall enjoy complete freedom in the use
of the port, on a footing of absolute equality. No distinction
shall be made between the nationals, property and flags of
the different States and those of the States under whose
sovereignty or authority the port is situated. There shall be
no restrictions other than those arising from stipulations con-
cerning customs, police, public health, emigration or immigra-
tion, or the import or export of prohibited goods, whilst these
stipulations must not impede traffic without good reason.

" All charges shall be levied under the conditions of equality
prescribed above, and shall be reasonable having regard to
various expenses incurred.

" All charges other than those imposed for the use of the
port or of the approaches thereto, or of the facilities afforded
in it, are prohibited.

" In the absence of any special organization it shall be the
duty of the State under whose sovereignty the port is situated,
to remove as quickly as possible any danger or obstacle to
navigation and to facilitate the operation of vessels in the
port. The State may undertake all work for the upkeep and
improvement of the port or its approaches, but shall be bound
to suspend them if it is proved that they are calculated to
prejudice the use of the port and of its approaches. It may
also undertake works for territorial defence.

" (b) Provisions applicable only to zones which are not
free. — Customs, local octroi, or consumption duties imposed

25*

388 The Genoa Conference

on imports or exports through the port shall be levied without
any differential treatment on account of the flag. In the
absence of special circumstances justifying an exception on
account of economic needs, the customs dues must not be
higher than those imposed at the other customs frontiers
of the State concerned.

" (c) Free zones. — With the exception of the duties imposed
for the use of the port, and as a return for expenses
incurred, the only due which may be levied in free zones is
a statistical duty not exceeding i per mille ad valorem. The
facilities granted for the erection or use of warehouses, as
also for the packing and unpacking of goods, shall be in
accordance with trade requirements for the time being. Per-
sons, baggage and goods and also vessels, coaches and goods
stock and other means of transport, proceeding from or to
the free zone and crossing the territory of the State under
whose sovereignty or authority the port is situated, shall be
considered in transit across the said State, if proceeding from
or to the territory of any other State.

" (d) Miscellaneous Provisions. — These stipulations do not
affect the regime to be applied to national maritime coasting
trade. Those provisions of the Convention on Freedom of
Transit which relate to a period of war, as also those concern-
ing the settlement of disputes arising between States, also
apply to ports placed under an international regime.

IV. — RECOMMENDATIONS RELATIVE TO THE INTERNATIONAL
REGIME OF RAILWAYS

" It is recommended :

" (a) That the various States should adopt all possible
measures which will facilitate the international transport of
goods, with special reference to : through transport on the
basis, as far as possible, on a single waybill, subject through-
out to the same obligations ; treatment of goods during the
journey ; trans-shipment, when this operation cannot be
avoided ; the form in which international tariffs are to be
established, and the conditions of their application.

Appendix VI 889

" (b) That the various States should adopt all possible
measures which will facilitate the international transport of
passengers and baggage under conditions of speed and comfort
corresponding to the importance of each train service, special
regard being paid to the question of the establishment of
services with through-booking facilities without change of
carriage, and to that of through-booking of baggage.

" (c) That the various States should take all possible
measures which will permit and facilitate the reciprocal
utilization and exchange of their rolling stock, as long as
modifications in the essential characteristics of a railway
system or of rolling stock are not involved.

" (d) That the transport facilities and tariffs shall not
depend, under the same conditions, either on the nationality
of the passengers, on the ownership or commercial origin of
the goods, or on the flag or ownership of the vessels employed
either before or after their transport by rail, etc. The fore-
going provision does not preclude the establishment of
different tariffs according as operations in respect of internal
import, export or transit traffic are concerned. The question
of combined rail and sea tariffs is not affected.

" Provision is further made for exchange of information,
as also for deviation from the terms of the Convention in cases
of any emergency affecting the safety of the State or the vital
interests of the country.

ANNEX II
A.— AGREEMENTS

CONCLUDED AT PORTO ROSA, BETWEEN THE SEVEN SUCCES-
SION STATES OF THE FORMER A USTRO-HUNGARIAN EMPIRE,
FOR THE REGULATION OF INTERNATIONAL RAILWAY TRAFFIC

" In order to facilitate the international transport of pas-
sengers, baggage, and goods, the High Contracting Parties,
pending the coming into force of a general European Conven-
tion, and without prejudice to the stipulations of that
Convention, agree to the following provisions :

890 The Genoa Conference

ARTICLE i

" The Contracting Parties undertake to take all measures
calculated to put an end to the special difficulties in the way
of regular carriage of passengers and goods in Central Europe,
and especially as regards international traffic on the railway
systems of the Succession States.

" In this connection, they undertake to open as soon as
possible, and to maintain open to international traffic, with-
out distinction as to the goods carried, all frontier stations
which are of importance for such traffic and which are still
closed."

ARTICLE 2

" In order to accelerate the crossing of frontiers and to
simplify the formalities thereby entailed, all frontier services
should, as far as circumstances permit, be concentrated in a
common station.

" In this connection, the Contracting Party in whose terri-
tory the common station is situated shall permit the other
Contracting Party to establish a railway agency at that station.

" The Contracting Parties agree that the regulations for
the working of frontier stations shall be established as soon
as possible by special agreements concluded in a spirit of
mutual conciliation."

ARTICLE 3

" In cases in which traffic is stopped or limited by difficulties
of operation, the administrations of the system affected by
these difficulties should come to an agreement as soon as
possible with the railway administrations of the other State
concerned, as to the conditions under which traffic coming
from, or destined for the territory of one of the Contracting
Parties may be maintained.

' The railway administrations should make every endeavour
to prevent any interruption of traffic, and should, if necessary,
apply for assistance to the railway administrations of the
other Contracting Party concerned.

Appendix VI 39 1

l* In cases in which the traffic in any country is restricted,
reciprocal traffic between the Contracting States, and transit
traffic coming from the territory of one of the Contracting
Parties, should not be subject to restrictions more severe than
those applied to national traffic or to transit traffic destined
for the same country."

ARTICLE 4

" The Contracting Parties shall endeavour to meet the
requirements of direct international traffic passing over their
railway system, by establishing good connections both for
passenger and for goods traffic and by affording each other,
in so far as is possible, mutual aid and assistance."

ARTICLE 5

" The Contracting Parties undertake, without prejudice to
existing conventions, to co-operate in the re-establishment of
direct international passenger services, and in the establish-
ment of new services corresponding to present traffic require-
ments, provided with suitable rolling stock and schedules
and, where possible, with through carriages."

ARTICLE 6

' The Contracting Parties shall see to it that their railway
administrations shall, as soon as possible, conclude agreements
with regard to the establishment of through long-distance
goods trains, and to the acceleration of certain traffic in whole
wagons or groups of wagons, more particularly with a view
to facilitating carriage of foodstuffs, live-stock, fuel, mineral
oil and its derivatives.

" The Contracting Parties shall request the railway
administrations to give each other notice of large consign-
ments to be carried on complete trains, and to agree together
as to the best means of carrying such traffic."

ARTICLE 7

" Goods traffic by rail between the Contracting Parties shall
be carried under the regime laid down by the International

892 The Genoa Conference

Convention of October I4th, 1890, on Goods Traffic by Rail,
with the modifications provided for in the supplementary
Agreement of July i6th, 1895, and the additional Conventions
of June i6th, 1898, and September igth, 1906, and the supple-
mentary uniform conditions and uniform Conventions drawn
up by the International Transportation Committee.

" Nevertheless, in view of the difficulties which still hinder
certain kinds of traffic, provision may be made for certain
exemptions from this Convention in any agreements which
are concluded between the railway administrations.

" Exceptions to the Berne Convention should only be
admitted in these Agreements, submitted for ratification by
the various Governments, for such period and within such
limits as are absolutely necessary.

" The Contracting Parties agree to recognize that it is
highly desirable in the interests of commerce that such excep-
tions should not affect the responsibility of railways for loss,
damage or delay in delivery."

ARTICLE 8

;' Through rates for passenger, baggage and goods traffic
between the territories of the Contracting Parties, and for
traffic between their territories and those of a third State,
passing through the territory of one of the Contracting Parties,
should be provided for as soon as circumstances permit.

" In the meantime, the Contracting Parties shall take
measures to ensure that, as far as the exchange allows, through
rates are provided as soon as possible for passenger traffic
and for the most important classes of goods traffic, at least on
the routes most employed, and that, as far as possible, steps
should be taken to allow through rates for all traffic."

ARTICLE 9

If the payment of transportation charges and other
liabilities resulting from the Carnage Contract, and expressed
in a foreign currency, is made in the national currency, the

Appendix VI 393

rate of conversion will, in conformity with the present practice,
be fixed by the receiving railway administration.

" The rate of exchange adopted should not, however, serve
as a means of competition in favour, or to the detriment of
another line."

ARTICLE 10

" The Contracting Parties recognize that it is highly
desirable that railway administrations should conclude an
agreement regarding the settlement of accounts, and based
upon the following principles :

" (a) Mutual debts and liabilities resulting from the settle-
ment of accounts of international traffic shall be converted,
for clearance, into the currency of the country whose liabilities
are the highest.

" (b) Payments shall be made in this currency.

" (c) Conversion shall be made upon the basis of the average
rate of the Zurich exchange during the period in which the
debts and liabilities are contracted.

" (d) Measures shall be taken to provide against exchange
fluctuations."

ARTICLE n

" In order to meet the special requirements of international
railway traffic, and more especially to avoid loss of time,
customs services at the frontier should be organized in such a
manner as to allow the transit of goods across the frontier at
any time in accordance with traffic requirements, avoiding
unnecessary delay at the frontiers.

" As regards passenger traffic, customs formalities should
therefore be regulated so as to allow the examination of regis-
tered baggage, destined for a station in the interior possessing
a Customs Office, to take place at that station. The examina-
tion of other registered baggage and of hand luggage should,
if circumstances permit, be carried out on the trains.

" As regards goods traffic, customs formalities should be
regulated so as to avoid any unloading, verification or sealing

894 The Genoa Conference

at the frontier of goods assigned to another Customs Office,
on condition that the regular collection of customs duties is
not compromised thereby.

" Without prejudice to greater facilities which may later
be accorded, the Contracting Parties consider that the adop-
tion of the regulations laid down in the annex is highly
desirable."

ARTICLE 12

" The present Agreements may be denounced by any one
of the Contracting Parties by giving six months' notice.

" No such denunciation shall, however, be accepted until
a year after the coming into force of the present Agreements."

ARTICLE 13

" Any disputes between States regarding the interpretation
or application of the present Agreements shall be settled in
accordance with the procedure laid down for the settlement
of disputes regarding the interpretation or application of the
provisions of the Peace Treaties concerning communications
and transit.

" The present Agreements shall be ratified as soon as
possible.

" Each State shall forward its ratification to the Italian
Government, which shall notify the other signatory States.

" The ratifications shall be deposited in the archives of the
Italian Government.

'' The present Agreements shall come into force, for each
signatory State, from the date of deposit of its ratification,
and the said State shall from that moment be bound by these
Agreements in respect of other States whose ratifications have
already been deposited."

Appendix VI 895

B.— REGULATIONS

FOR THE CUSTOMS SERVICE ON RAILWAYS, DRAWN UP AT

PORTO ROSA

i. — GOODS TRAFFIC
PARAGRAPH i

" Goods trains shall be allowed to cross customs boundaries
at any time, including Sundays and holidays, by day or
night, and customs operations should be performed under the
same conditions. The arrival of every goods train from
abroad should be notified, in conformity with the Customs
Regulations, to the frontier Customs Office to which the
documents prescribed by the Customs Regulations should,
at the same time, be presented."

PARAGRAPH 2

" Railway administrations shall be required to notify
Customs Offices located in stations and Customs Agencies
(Railway Customs Offices) of the schedules of all trains cross-
ing the frontier and trains connecting with these, as well as
alterations in these schedules, at least eight days before they
are put into operation.

" The Railway Customs Offices shall also be informed, as
soon as possible, of any considerable delays, of the cancelling
of trains, and of the running of special trains, and light
engines."

PARAGRAPH 3

" i. Goods, the despatch of which has been regularly
notified, and which are loaded in wagons duly sealed, and
consigned, without trans-shipment, to a station in the interior
of the country with a duly qualified Customs Office, need not
be unloaded and examined at the frontier, and such packages
need not be sealed.

896 The Genoa Conference

" 2. Goods loaded in wagons duly sealed passing over the
territory of one of the Contracting Parties, without breaking
bulk, to the territory of another Contracting Party, if duly
notified as in transit, need not be unloaded and examined by
the Customs at the frontier or within the country, and such
packages need not be sealed.

"3. The putting into force of the provisions of Paragraphs
i and 2 shall be subject to the condition that the railway
administrations concerned shall be responsible for the arrival
of wagons at the competent Customs Office, whether at the
frontier or within the country, within the period laid down,
and with seals intact.

" 4. As a general rule, goods not subject to customs duties
arriving at frontier Customs Offices in order to undergo
customs formalities, need not be unloaded and weighed, if
the customs formalities can be carried out without unloading.
In determining the weight of goods the Customs Authorities
shall in general accept as the weight of the truck the weight
marked thereon.

"5. The foregoing exemptions from customs examination
and sealing of packages shall be exceptionally applied even in
the case of trans-shipment of goods (from one wagon to
another) under customs supervision, without involving the
necessity of carrying out the regular customs formalities,
when the trans-shipment of goods is unavoidable by reason of
any circumstance attributable to the railway.

" 6. The facilities provided in this paragraph shall not be
given in cases where there is reasonable ground to suspect
fraud."

PARAGRAPH 4

" The Customs Administrations of all the Contracting
Parties shall recognize as sufficient any affixing of customs
seals by the administration of any one of the Contracting
Parties, which they shall have ascertained to comply with the
conditions prevailing within their own customs area for the
affixing of seals to trucks which are to pass the Customs."

Appendix VI 397

2. — PASSENGER AND LUGGAGE TRAFFIC
PARAGRAPH i

" Passenger trains crossing frontiers shall enjoy the same
facilities as regards days and times of crossing as those laid
down for goods trains in Part i."

PARAGRAPH 2

" At the time of crossing the customs boundary, passenger
coaches shall contain only hand baggage."

PARAGRAPH 3

" Hand baggage and passengers' registered baggage shall
in general undergo customs examination at the frontier
Customs Office. Other facilities may, nevertheless, be granted
to meet the needs of passenger traffic. In particular, efforts
shall be made to take the necessary steps to have registered
baggage examined at the Customs Office of the destination
station. Customs Administrations shall also provide, as far
as possible, for examination of passengers' baggage in the
train, even on through trains or coaches."

PARAGRAPH 4

" Customs formalities in frontier stations should be carried
through sufficiently rapidly for all baggage, especially baggage
in transit, to continue the journey by the connecting train."

PARAGRAPH 5

" Fast or ordinary goods traffic carried on passenger trains
shall be subject to the same conditions and formalities as
similar goods carried on goods trains.

" Notwithstanding, fast goods traffic or highly perishable
goods which are carried on passenger trains shall be forwarded
by the same accelerated procedure as baggage."

APPENDIX VII

The following letter was addressed by the Pope to Cardinal
Gasparri, Secretary of State :

"The Vatican,

"April 29th, 1922.

" Signor Cardinale, — Our intense desire to see the final
establishment in the world of true peace, which consists
principally in the reconciliation of hearts and not simply in
the cessation of hostilities, causes us to follow with eagerness,
not unmixed with anxiety, the course of the Conference at
Genoa, for which we have already invited all faithful people
to implore fervently the benediction of God. We cannot
conceal, Signor Cardinale, our satisfaction at knowing that,
by the good will of all, those obstacles are removed which
seemed to make the possibility of any agreement very remote.
No one can doubt that such a great council, which includes
in itself the representatives of nearly all civilizations, will
mark an epoch for Christian civilization, especially in Europe.
The peoples who have suffered so much through the past
conflict and its sad consequences naturally desire that as far
as possible, through the agency of this Conference, the danger
of new wars should be removed, and provision be made as
quickly as possible for the economic restoration of Europe.
By the fulfilment of these noble intentions, or by laying the
foundation for a future and not distant fulfilment, the Con-
ference of Genoa will have deserved well of humanity, which
will owe to that event a new era in which it will be possible
to say in the Biblical phrase that ' Justice and Peace have
kissed one another,' charity not being divorced from the
requirements of justice.

" Such a return to the normal state of society in its essential
elements will be a consummate advantage to all, victors and

398

Appendix VII 399

vanquished alike, but especially to those unhappy populations
of Eastern Europe, which, having been already desolated by
war, by intestine strife, by religious persecution, are now
in addition decimated by famine and disease, though the
vast resources which they embrace in their territories might
contribute greatly to the social restoration of the world.

" To these populations, although divided from our com-
munion by unhappy events in the past, we, like our lamented
predecessor, offer our expression of sympathy and comfort,
together with the ardent prayer of our paternal heart that
they may enjoy with us those same gifts of unity and of
peace which spring from a common participation in the holy
mysteries.

" But if, to crown all disasters, the attempts at a real
pacification and an enduring accord should fail in this Con-
ference also, who can think, Signer Cardinale, without trem-
bling, how much the condition of Europe, already painful
and threatening, would be aggravated, with the prospect of
even greater sufferings and the danger of conflagrations which
would overturn all Christian civilizations ; for St. Thomas
well said (' De Regimine Principum,' i. 10), and experience
confirms : ' Desperatio audaciter ad quaelibet attentanda
prsecipitat ?

" Thus it is that we, in the universal mission of charity
entrusted to us by the Divine Redeemer, entreat all men to
unite in furthering that common good which will result in the
end in the greater and more enduring advantage of the
individual peoples. But since this cannot be fully realized
without the efficacious favour of that God who is, and ought
to be recognized as, the Prime Author and Supreme Ruler
of society — ' Rex regum et Dominus dominantium ' — we
exhort all Christian people once more to turn to Him,
repeating on behalf of civil society the beautiful prayer we
offered for the Church in Holy week : ' Deus Dominus
Noster pacificare, adunare et custodire dignetur toto orbe
terrarum, detque nobis quietam et tranquillam vitam
degentibus glorificare Deum Patrem omnipotentem.'

400 The Genoa Conference

" Thus truly shall we attain that public prosperity which
is the natural object of every civil society, and which the
Church also promotes, directing humanity to its supernatural
end : ' Ut sic transeamus per bona temporalia ut non
amittamus aeterna.'

" While thus communicating our sentiments and prayers
to the delegates, and through them to their respective Govern-
ments and peoples, we heartily extend to them the Apostolic
benediction.

" Pius P. P. XI."

APPENDIX VIII

REPLY OF THE RUSSIAN DELEGATION TO THE
MEMORANDUM OF MAY 2ND, 1922

Before examining the clauses of the Memorandum signed by
a group of Powers and enclosed with the letter of M. Schanzer,
President of the Political Sub-Commission, which was com-
municated to the Russian Delegation on May 2nd, the latter,
to its great regret, feels compelled to observe that this Memo-
randum does not provide the equitable solution of the Russian
problem which was hoped for, and that in certain respects it is
less satisfactory than the conditions accorded to Russia by the
Agreement of the Villa Albertis of 2oth April, and even than
the London Memorandum. At the same time, the contents of
the Memorandum of May 2nd constitute a marked deviation
from the lines laid down for the Genoa Conference by the
Cannes decisions.

The Inviting States, in convening Russia to the present
Conference at the same time as the other States, gave as the
reason for the invitation " the necessity of remedying the
paralysis of the European system." The means for the attain-
ment of this object were to be the " economic reconstruction
of Central and Eastern Europe." It was unanimously agreed
that Russia was the State whose economic reconstruction was
of the greatest importance for Europe and for the whole world.
In its first Memorandum, sent as a reply to the London
Memorandum, the Russian Delegation had drawn the attention
of the Conference to the fact that the problem of the recon-
struction of Russia should be the basis of its work. The
Russian Delegation declared its willingness to consider, in
conjunction with the other Powers, this fundamental problem,
the solution of which, by restoring to the industry of the world
140,000,000 consumers and an immense quantity of raw

40 r 26

402 The Genoa Conference

material, would contribute towards the alleviation of the
present crisis, the prevention of unemployment, and the relief
of the misery due to the World War, the intervention and the
blockade.

In compliance with the Cannes invitation the Russian
Delegation came to Genoa with a number of schemes and
proposals regarding the credits and loans required by Russia
in exchange for real guarantees, and specifying the legal
guarantees already embodied in Russian legislation, for the
purpose of ensuring to foreign nationals desirous of bringing to
Russia their technical knowledge and their capital, security
for their property, rights and profits. It was the intention of
the Russian Delegation to present a list of industrial, mining,
agricultural and other concessions which it was desirous of
according to foreigners.

Up to the present, however, this, the most important aspect
of the Russian problem and of the economic problem of the
world, has not even been touched upon.

The efforts of the Russian Delegates to bring this question
before the Committee of Experts appointed to examine the
Russian question were of no avail.

The Committee of Experts laid down, as a preliminary con-
dition of any examination of these questions, the obligation on
the part of Russia to agree to the repayment of State debts and
private cla:ms. This method was bound to frustrate the most
important part of the work of the Conference. Instead of
beginning by examining those aspects of the Russian problem
which would give rise to least controversy, both the Committee
of Experts and the Memorandum of May 2nd gave precedence
to a question which, owing to its political and legal complexity,
was bound to give rise to most animated discussions.

As a result of this initial mistake the problems of the future,
which affect everyone, have been subordinated to the interests
of the past, which affect only certain groups of foreigners.
The statement that the recognition of the debts of former
Russian Governments and of private claims is an essential
condition for the co-operation of foreign capital in improving

Appendix VIII 403

the credit of the new Russia, is contradicted by the fact that
many capitalists have begun to contribute towards the recovery
of Russia without waiting for the settlement of the question
of debts. Capital will not be attracted to Russia by any one
solution of this question ; that will depend on the guarantees
which the Russian Government can provide for the future and
on the international consolidation of its position which will
result from its de jure recognition.

Suspicion has been cast upon the attitude of the Russian
Government towards future creditors owing to its reluctance
to agree blindly to proposals of too onerous a nature ; this
suspicion arises from interested motives.

The repudiation of the debts and obligations contracted
under the old regime, which is held in abhorrence by the people,
cannot in any way predetermine the attitude of Soviet Russia,
the product of the revolution, towards those who may come
forward with their capital and their technical knowledge to
assist in her recovery. On the contrary, the fact that the
Russian Delegation, in considering the question of the settle-
ment of debts, pays most careful attention to the interests of
the Russian people and to the economic possibilities of Russia,
proves that it only desires to contract obligations which it is
certain that Russia will be able to carry out.

It may be observed that more than one of the States present
at the Genoa Conference has in the past repudiated debts and
obligations which it had contracted, and that more than one
has confiscated or sequestered the property of foreign nationals,
as well as of its own nationals, without for that reason being
exposed to the ostracism inflicted upon Soviet Russia.

It is difficult to explain the persistence with which certain
Powers are endeavouring to exclude Russia from international
economic and political intercourse, and to refuse her equality
of treatment, by the mere fact that certain financial claims have
not been met. If one reflects upon the cost of this attitude to
the world at large, to the States which have adopted it, and to
Russia herself, which, for nearly five years, has suffered from
its disastrous consequences, it will seem scarcely credible that

26*

404 The Genoa Conference

the only interests involved are those of bond-holders, or of
former holders of nationalized property. The discussions of
the last few days, particularly on the question of the restitution
of nationalized property to its former owners, show clearly
that a purely material question has been complicated by the
introduction of a political issue. The controversy which is
being waged at Genoa on the Russian problem has a wider and
deeper significance. The political and social reaction which in
most countries followed the war is aiming at the complete
triumph of capitalistic individualism through the defeat of
Soviet Russia, which represents collectivist tendencies in the
organization of Society. The Soviet Delegation has refused,
and still refuses, to introduce political considerations of any
kind into the negotiations in progress, but it cannot refrain
from pointing out that this attempt to secure at Genoa the
triumph of the programme of one party or of one social system
is contrary to the letter and to the spirit of the first Cannes
Resolution. If the work of the Conference is jeopardized, the
responsibility will rest entirely with those Powers which are
thwarting the general desire for agreement by placing the
interests of certain social groups above the common interests
of Europe.

EXAMINATION OF THE PREAMBLE OF THE MEMORANDUM OF

MAY 2ND.

The Russian Delegation realizes that the preamble of the
Memorandum of May 2nd seeks to justify the opinion that the
prolonged economic isolation of Russia would be harmful to her
alone, while the rest of Europe would always find means of
escaping from its economic embarrassments. The object of
this assertion is clear : Russia, which needs the co-operation
of the other Powers for her economic restoration, must alone
bear the sacrifices which that co-operation entails.

This assertion is contrary to public opinion, which, as shown
by the expressed views of competent judges and by the repeated
manifestations of the working masses, insists that Russia
cannot be replaced and that her absence from the world's

Appendix VIII 405

market causes a dislocation for which there is no remedy.
Russia's place can be filled by no other country. The isolation
of Russia leads to political consequences which are no less
disastrous than its economic consequences. The safety of
Europe and the peace of the world require that this abnormal
state of affairs should be brought to an and. As long as Russia
remains in a kind of economic and political quarantine, certain
States which are near or distant neighbours of Russia will be
encouraged by this provisional state of affairs to embark on
military enterprises and, by arrogating to themselves the
functions of a " police force of European civilization," will seek
to trouble the peace of the world and to seize the territory and
riches of Russia and of the other Soviet Republics. The
solution of the Russian problem will not, therefore, be brought
a day nearer unless the Powers assembled at Genoa fully realize
that the sacrifices which they require of Russia must find their
counterpart in similar sacrifices on their side.

In its letter addressed to Mr. Lloyd George on April 2oth
the Russian Delegation made important concessions, but at the
same time raised the question of the credits and loans to be
granted to the Russian Government. At the first meeting of
the Committee of Experts the Russian Delegation requested
the members of that Committee to undertake the detailed
examination of this question. The Committee, however, as
has already been noted, rejected the proposal. This question,
which is so important for Russia, remains unanswered in the
Memorandum of May 2nd. Instead of specifying the credits
to be granted to the Russian Government, the preamble of the
Memorandum merely enumerates the credits which the various
Governments are prepared to grant to those of their nationals
who desire to trade with Russia. This question, however
interesting it may be for the private traders of other countries,
has nothing to do with the question raised by the Russian
Delegation. Moreover, private traders and manufacturers
themselves cou'd not make use of the credits to the desired
extent if the financial resources necessary for restoring the
productive forces of the country were not assured to the

406 The Genoa Conference

Russian Government ; and this restoration is an indispensable
condition of commercial relations of any importance between
Russia and other States. If the Russian Government has not
financial resources or credits for restoring industry and agri-
culture, for renewing means of transport and for establishing a
currency with a stable exchange value by stopping the issue of
constantly depreciating paper roubles, it will be practically
impossible to realize any substantial volume of trade with
foreign countries. Furthermore, measures designed to achieve
the restoration of Russia can only be carried into effect by the
Government itself, and in accordance with a pre-arranged plan.
It was the intention of the Russian Delegation to submit to
the Conference a scheme on these lines, drawn up by qualified
scientific and industrial experts.

EXAMINATION OF CLAUSE I
A. — PROHIBITION OF SUBVERSIVE PROPAGANDA

The Russian Delegation notes with some surprise a striking
contrast in the Memorandum of May 2nd. Whereas, in the
main part of the Memorandum, which deals with the restora-
tion of Russia, no exact proposals are put forward, but only
general considerations, the question of the settlement of
State debts and of private claims is dealt with in the form of
a definite Agreement, in which an attempt has been made to
provide for the smallest details.

The Russian Delegation is no less surprised to find that
political clauses, which have never yet been mentioned in the
discussions of the Russian Delegation with the other Delega-
tions, have been included in this financial Agreement at the
head of all the other clauses.

From among the Cannes Resolutions, which were of a
political character and which, moreover, were accepted by
the Russian Government, the Memorandum singles out one
provision, the fifth, concerning subversive propaganda, and
gives it a new meaning, by transforming it into a unilateral
obligation for Russia. The Russian Government has more
than once proved that the really subversive propaganda,

Appendix VIII 407

carried on by means of the organization and despatch of
armed bands, has been the work of certain countries which
are the neighbours of Russia and which have actually signed
the Memorandum.

By an extension of the meaning of this Resolution the
Memorandum requires that Russia shall " suppress all attempts
in its territory to assist revolutionary movements in other
States." If, by this phrase, the Memorandum means pro-
hibiting the activity of political parties or of workers'
organizations, the Russian Delegation cannot agree to such
prohibition, except in cases where the activity in question is
contrary to the laws of the country.

In the same clause the Memorandum requires Russia to
" refrain from any action which might disturb the territorial
and political status quo in other States." The Russian
Delegation regards this proposal as a veiled attempt to make
Russia recognize the treaties concluded by other States.
Russia is prepared, at the proper moment, to discuss this
political question with the Powers concerned.

Another political question which has been imported without
relevance into the Memorandum is that of the relations
between Rumania and Russia, provided for in Clause 13.
As this question forms part of the general body of political,
territorial and other questions in dispute between Russia
and Rumania, it cannot be considered apart from them.

B. — RE-ESTABLISHMENT OF PEACE IN ASIA MINOR

The Russian Delegation is particularly surprised to observe
that allusion is made in the Memorandum to the question of
peace in Asia Minor. This is the more surprising, seeing that
Turkey was excluded from the Conference of Genoa in spite
of Russia's proposal that she should be invited. The presence
of Turkey at the Conference would, as a matter of fact, have
greatly contributed to the re-establishment of peace in Asia
Minor. Russia also, in view of her friendly relations with
Turkey, would have contributed to the achievement of the
object in view.

408 The Genoa Conference

The strict neutrality which the Memorandum of May 2nd
demands from Russia in the war which is being waged on
Turkish territory cannot differ from that imposed upon all the
Powers by International Law and International Conventions.

FINANCIAL CLAUSES

With regard to the other clauses of the Memorandum the
Russian Delegation must point out that the claims which
they contain are as a whole based upon the changes con-
sequent upon the Russian Revolution.

It is not for the Russian Delegation to defend that great
movement of the Russian people before an Assembly of
Powers, many of which have experienced more than one
revolution in the course of their history ; but the Russian
Delegation feels obliged to recall the principle that revolutions,
which constitute a violent break with the past, give rise to
new legal standards in the external and internal relations of
States. Governments and administrations created by revo-
lutions are not bound to respect the obligations of the
Governments which have been overthrown. The French
Convention, from which modern France claims direct descent,
proclaimed, on September 22nd, 1792, that " the sovereignty
of peoples is not bound by the treaties of tyrants." In
conformity with this declaration, revolutionary France not
only destroyed the political treaties entered into with foreign
countries under the old regime, but also repudiated her
National Debt. She only consented to pay one-third of it,
and that for motives of political expediency. This was the
' Tiers consolide," the interest upon which was not regularly
paid until the beginning of the nineteenth century.

This procedure, exalted into a doctrine by eminent legal
experts, has been almost universally followed by Govern-
ments created by revolutions or by wars of liberation.

The United States repudiated the treaties of their pre-
decessors, England and Spain.

Moreover, the Governments of the victorious countries,
during the war, and, above all, at the time of the conclusion

Appendix VIII 409

of the Peace Treaty, did not hesitate to seize property belong-
ing to nationals of the vanquished countries, situated in
their territory, and even in foreign territory.

In conformity with these precedents, Russia cannot be
forced to assume any responsibility towards foreign Powers
and their nationals for the cancellation of national debts,
and for the nationalization of private property.

Another point of law may be submitted. Is the Russian
Government responsible for damage caused by the civil war
to foreign property, rights and interests, beyond such damage
as was caused by the action of the Government in cancelling
debts and nationalizing property ? Here, again, legal tradi-
tion is in favour of the Russian Government. The Revolu-
tion, which, like all great popular movements, was an
enforcement of the will of the majority, does not admit any
obligation to indemnify those who suffered by it. When the
Tsarist Government was asked by foreign nationals, sup-
ported by their Governments, to compensate them for the
losses which they had suffered during the revolutionary dis-
turbances of 1905 to 1906, it rejected their claims, basing its
rejection on the fact that, since it had not granted com-
pensations to its own subjects for similar losses, it could not
place foreigners in a privileged position in this respect.

THE CANNES CONDITIONS

From a legal point of view Russia is, therefore, in no way
bound to pay debts contracted in the past, to restore property
or compensate its former owners, or to pay indemnities for
other losses occasioned to foreign subjects, either by the
legislation established by Russia in the exercise of her
sovereignty, or by the events of the Revolution. Neverthe-
less, in a spirit of conciliation, and in the hope of reaching an
agreement with all the Powers, Russia has accepted the
principle contained in the third of the Cannes Conditions, under
reserve of reciprocity. Such reciprocity — that is to say, the
obligation of all Governments to compensate for losses
occasioned by their action or negligence — has already been

410 The Genoa Conference

established by the official interpretation of the third of the
Cannes Conditions, which was referred to in the first Russian
Memorandum.

The war debts, having been incurred for a specific purpose,
were automatically cancelled by the fact that Russia, having
retired from the war and having had no share in its advan-
tages, could not be expected to share its cost. With this
exception, the Russian Delegation has expressed its readiness
to agree to the payment of State debts, on condition that the
losses caused to Russia by intervention and blockade are
recognized.

In law, the Russian counterclaims are far more justified
than the claims of foreign Powers and their nationals. Tradi-
tion and practice both lay down that the responsibility for
losses caused by intervention and blockade should be borne
by the Governments which were the authors of these measures.
It will be sufficient to recall the decision of the Court of
Arbitration of Geneva on September i4th, 1872, by which
Great Britain was condemned to pay the United States
fifteen and a half million dollars for losses caused by the
privateer Alabama, which, during the Civil War between the
Northern and Southern States, had assisted the latter.

The campaign of intervention and blockade carried on by
the Allies and Neutrals against Russia constituted official
acts of war. The documents published in Annex II. of the
first Russian Memorandum proved clearly that the chiefs of
the counter-revolutionary armies were such only in appear-
ance, and that the real commanders of these armies were the
foreign generals despatched specially for that purpose by
certain Powers. These Powers not only took part directly
in the Civil War, but were the actual authors of it.

In its desire to obtain a practical agreement, however, the
Russian Delegation, following on the conversations which
took place at the Villa de Albertis, decided to pursue a policy
of liberal concessions, and expressed its readiness to abandon
its counter-claims on certain conditions, and to assume the
obligations of the Governments which have been overthrown

Appendix VIII 41 1

in exchange for a series of concessions on the part of the
Powers ; the most important of which is the placing at the
disposal of the Russian Government of real credits to an
amount fixed in advance. Unfortunately, this condition has
not been fulfilled. The Memorandum says nothing of the
credits which the signatories are definitely and finally pre-
pared to grant to the Russian Government ; moreover, the
credits which they undertake to grant to their own subjects
for the purpose of trading with Russia are purely optional.

Similarly, the Memorandum raises again in its entirety
the question of war debts, the cancellation of which was one
of the conditions on which Russia was willing to abandon her
counter-claims. The Memorandum also raises the question
of the moratorium and the cancellation of interest on pre-war
debts, referring the final decision on this question to an
arbitral tribunal, instead of deciding it in the Agreement itself.
This again is contrary to the provisions of the London
Memorandum.

In so doing, the signatories of the Memorandum release
themselves from their obligations, and recognize that the
opposite party is equally released. In this way, the laborious
negotiations which led to the Agreement of the Villa de
Albertis have been rendered vain. The Russian Delegation
has no desire to fix the responsibility for this on any particular
Power ; but, in any case, Russia is not to blame.

The negotiations have been rendered still more difficult
by the persistent attempt of certain States to impose on
Russia, in Article VII., obligations inconsistent with her
social system and with Article I. of the Cannes Resolutions.

PRIVATE PROPERTY (CLAUSE 7)

Clause 7 begins with an admirable preamble recognizing
the sovereign right of Russia to regulate within her own
territory as she thinks fit her system of ownership, economy
and government, but the operative part of the clause is in
flagrant contradiction to its preamble. The sovereignty of
the Russian State becomes the sport of chance. It mav be

412 The Genoa Conference

impaired by the decisions of the Mixed Arbitral Tribunal con-
sisting of four foreigners and one Russian, which will decide,
in the last resort, whether the property of foreigners should
be reinstated, restored or compensated.

On this question the Russian Delegation must point out
that, in the consideration of disputes of this kind, the particu-
lar points of disagreement will inevitably lead to the pitting,
one against the other, of two forms of ownership, the con-
fliction between which has assumed to-day for the first time
in history a real and practical importance. In these circum-
stances there cannot be an impartial supreme arbiter, and,
under the provisions of Clause 7, the part of supreme arbiter
would inevitably be taken by one of the interested parties.
This would necessarly lead to the intervention of foreigners
in the internal affairs of Russia, and would in practice
do away with the inviolability of the system of ownership
existing in Russia, which is recognized at the beginning of
Clause 7.

Moreover, the Russian Delegation can see nothing of any
practical importance in Clause 7. Its inclusion in the
Memorandum of May 2nd can only be explained as the result
of a desire to satisfy certain class or party resentments, rather
than of any adequate knowledge of the state of affairs in
Russia. Apart from the perpetual conflicts between claimants
and the Russian Government, and between the latter and
foreign Powers, to which this clause will give rise, Clause 7,
so far from creating that mutual tolerance between the Soviet
regime and the capitalist regime which is the condition of any
fruitful co-operation, will only embitter the relations of these
two systems. Foreigners coming to Russia, not as the result
of an amicable agreement with the Russian Government, or
for the purpose of working under the protection of the Russian
laws, but by virtue of the decision of a Mixed Arbitral Tribunal,
would soon be conscious of a general feeling of hostility against
them.

In order to make it possible for the former owners of
nationalized property to apply their technical knowledge and

Appendix VIII 413

their capital in the economic restoration of Russia for their
own profit, the Russian Government has, on its side, recognized
their preferential right in all cases in which their former
property is the subject of a concession, either in the form of
a lease or in the form of a mixed partnership between State
and foreign capital, or in any other form providing for the
participation of foreigners.

The Russian Delegation also notes that the States con-
cerned, reserving all their solicitude for a small group of
foreign capitalists, and maintaining on theoretical points a quite
inexplicably uncompromising attitude, have sacrificed a large
number of foreign capitalists who are desirous of profiting by
the facilities and guarantees afforded them by the Russian
Government to enable them to return and resume work in
Russia. They have also sacrificed the interests of the nume-
rous small holders of Russian bonds, and small foreign pro-
prietors whose property has been nationalized or sequestered,
whom the Russian Government intended to include amongst
the claimants whose claims it recognized as just and equitable.
The Russian Delegation cannot refrain from expressing its
surprise that the Powers, such as France, whose nationals
include the majority of the small Russian bondholders, should
have insisted most strongly upon the necessity of restoring
property, thus subordinating the interests of small holders
of Russian bonds to those of certain groups which demand
the restoration of property.

CONCLUSIONS AND PROPOSALS

The Russian Government sent its representatives to the
Genoa Conference in the hope of concluding there an agree-
ment with other States which, without affecting the social
and political regime established as a result of the Revolution
and of the successful repulse of the attempts at intervention,
would lead not to an aggravation but to an improvement of
the economic and financial situation of Russia, and would at
the same time pave the way for an improvement in the
economic situation of Europe.

414 The Genoa Conference

But the achievement of this end presupposed the willing-
ness of the foreign Powers which had organized armed interven-
tion in Russia, to cease employing towards Russia the tone
of victor to vanquished, since Russia was not vanquished.
A common agreement could only have been reached if the tone
adopted had been that of States negotiating on a footing of
equality. Russia is ready to consent to substantial con-
cessions to foreign Powers in order to ensure the success of
the negotiations, but only on condition that equivalent con-
cessions will be made by the other contracting party in favour
of the Russian people. The Russian masses cannot be a
party to an agreement in which the concessions made are
not balanced by real advantages.

Another solution suggested by the difficulties of the situa-
tion would be the reciprocal cancellation of claims and counter-
claims arising out of past relations between Russia and the
other Powers. But even in the event of such a solution the
Russian Government fully intends to respect the interests of
small bondholders.

If, nevertheless, the Powers desire to find a solution of
the financial difference between themselves and Russia, it
is suggested that since this question requires a most exhaus-
tive examination of the nature and the scope of the claims
presented to Russia, and a more precise estimate of the credits
available for her, the work might be entrusted to a mixed
committee of experts appointed by the Conference. This
Committee would begin work at a date and in a place to be fixed
by agreement.

The Russian Delegation observes that the chief obstacle
which the Conference has met up to the present time is the
fact that all the Powers are not yet sufficiently embued with
the idea of reciprocity referred to above. At the same time, the
Delegation cannot but emphasize the fact that the negotiations
which have taken place have paved the way for a closer
understanding between Soviet Russia and foreign Powers.
The Russian Delegation considers that the divergencies of
view which have arisen in the discussion of the financial

Appendix VIII 415

differences between Russia and foreign Powers should not
constitute an obstacle to the settlement of other problems
which affect all countries alike, and, in particular, those
problems which concern the economic recovery of Europe
and Russia, and the establishment of peace — problems which
can and must be settled here at Genoa. Russia has come to
the Conference in a spirit of conciliation, and still cherishes
the hope that her efforts will be crowned with success.

APPENDIX IX

REPORT OF THE ECONOMIC COMMISSION
INTRODUCTION

The Third Commission, appointed to consider the proposals
of an economic character, met for the first time on April 13 th,
1922. On the motion of the Italian delegate, M. Maurice
Colrat, French delegate, was elected to the chair.

After deciding to base its labours on the joint report of the
London Experts, the Commission appointed two Sub-Com-
missions. The First Sub-Commission, under the chairmanship
of M. Colrat, examined Articles 41 to 53 of the London Report.
The Second Sub-Commission, under the chairmanship of M.
J. H. Ricard, French expert, examined Articles 54 to 57 of
the Report. A technical Committee presided over by M-
Fagnot, French expert, was entrusted by the First Sub-
Commission with the consideration of questions relating to
Labour. The First Sub-Commission held seventeen meetings,
from April i4th to May 5th, and the Second Sub-Commission
eight meetings from April I4th to 27th.

The Commission considered the reports of the two Sub-
Commissions at two Plenary meetings on April 28th and on
May 5th, and approved the following recommendations,
which are submitted to the Conference for adoption.

CHAPTER I

CUSTOMS TARIFFS ; CUSTOMS RESTRICTIONS ;
TREATIES AND CONVENTIONS

ARTICLE i

In order that the economic reconstruction of Europe may
proceed with the necessary assurance of rapidity and security,
it is desirable :

416

Appendix IX 4 IT

(1) That the territorial adjustments consequent on the
world war should change as little as possible the normal
channels of trade ;

That, accordingly, the States resulting from these adjust-
ments, or which have acquired ceded territory, should set
themselves to take, in the full exercise of their sovereignty,
all legal and administrative measures for this purpose, and
to proceed in case of need to come to arrangements or agree
upon recommendations such, for example, as those of
Porto Rosa.

(2) That, in order to assure to all the countries of Europe
the possibility of returning to the normal exchange of goods
and to the prosperity resulting therefrom, security should
be given to international commerce by all States, that
imports and exports will not be subjected to the grave in-
conveniences caused by instability in administrative and
legal measures.

A. CUSTOMS TARIFFS
ARTICLE 2

All Customs tariffs should be published ; such publication
should be accompanied by a clear and precise indication in
regard to each category of goods of all the duties collected
by the Customs authorities which are leviable on the importa-
tion or exportation of the goods concerned. In giving this
indication, Customs duties should be distinguished from other
charges collected by the Customs authorities at the time of
importation or exportation, in such a manner as to show
clearly and exactly in the case of each kind or category of goods
the total amount payable upon each unit of measure forming
the basis of taxation.

Efforts should be made to render comparable so far as
possible the nomenclature of Customs tariffs, and to assimilate
it to commercial terminology.

It is desirable that common principles should be adopted
generally for economic statistics.

27

418 The Genoa Conference

ARTICLE 3

The tariffs should be made so far as possible applicable
over substantial periods of time, and changes in rates and in
Customs regulations should be made as rarely as possible,
and duly published.

Countries are invited to consider the possibility of taking
the necessary steps to allow goods accompanied by direct
bills of lading, proving that the said goods were despatched
before the date of the publication of any new tariff, to benefit
by the application of the old rate of duty, other than goods
already warehoused in the country of destination.

The practice of frequent modification for the purpose of
economic warfare should be entirely abandoned.

ARTICLE 4

The right of States must be recognized to dispose freely
of their natural resources, and to reserve to themselves, by
all appropriate means, their output of raw materials, where
this appears to be insufficient in quantity to meet the con-
sumption of the national industry, or to be threatened with
a deficit owing to the increased demand from foreign countries
resulting from exceptional financial or economic conditions.

On the other hand, if the output of raw materials is con-
siderably in excess of the needs of the country of origin, it
is desirable that their exportation should not be subjected
to conditions putting foreign users in a markedly inferior
position.

To this end, no export duty should be maintained or es-
tablished upon raw materials, the output of which exceeds
home needs, except duties of a purely fiscal character which,
on account of this very character, should not exceed a low
percentage of the value of the product, although they may
vary according to the country and the nature of the product.

While the principles above cited should be adopted so far
and so soon as possible, it is recognized that certain States
cannot, having regard to the exceptional conditions in which

Appendix IX 419

they find themselves, put them into practice so long as these
circumstances exist.

Subject to treaties and agreements, export duties should not
vary according to the foreign country of destination.*

ARTICLE 5

Subject to the existing Treaties and Agreements with regard
thereto, the regime applied by each of the States to the mer-
chandise of the other States, whether imported or exported,
should not depend in any case upon the flag of the vessel in
which the goods are carried, or upon the nationality of its
owner.

B. IMPORT AND EXPORT PROHIBITIONS
ARTICLE 6

Whatever may be the importance of the reasons of an
economic or financial character which certain States allege,
in the exceptional circumstances in which they find themselves,
as justifying the maintenance or institution of import or
export prohibitions or restrictions, it is agreed that these
measures constitute at the present time one of the gravest
obstacles to international trade.

In consequence, it is desirable that no effort should be
spared to reduce them as soon as possible to the smallest

number.

ARTICLE 7

Certain exceptions to this rule must be anticipated, notably
in the case of goods subject to a monopoly, or for the purpose
of providing for national necessities, the safeguarding of public
health, morals or security, or the protection of animals and
plants from pests and diseases.

But the restriction of imports or exports by means of a
system of prohibitions subject to licences, for whatever reason
it may be established, interferes to such an extent with inter-
national trade that its inconveniences should be reduced as
much as possible by arrangements which will permit traders

* Spanish reserve regarding the whole Article.

27*

420 The Genoa Conference

to ascertain easily and in advance the conditions under which
licences can be obtained.

ARTICLE 8

It is accordingly agreed that, if licences are granted, the
conditions under which they can be obtained should be
publicly announced and clearly stated ; that the licensing
system should be as simple and unvarying as possible, and
that every arrangement should be made to secure that appli-
cations for licences addressed to the authorities or organizations
which are declared to be competent for the purpose should
be dealt with rapidly.

C. TREATIES AND CONVENTIONS
ARTICLE 9

The Conference recalls the principle of the equitable treat-
ment of commerce set out in Article 23 of the Covenant of
the League of Nations, and earnestly recommends that com-
mercial relations should be resumed upon the basis of
commercial treaties resting on the one hand upon the system
of reciprocity adapted to special circumstances, and containing
on the other hand, so far as possible, the most-favoured-nation
clause.*

NOTE i. — The majority of the countries represented on
the Commission, while recognizing the temporary difficulties
which may preclude the general adoption of the most-favoured-
nation treatment, declare that this is the goal at which they
should aim.f

NOTE 2. — The majority of the States also declare that it
is desirable that the States should not bind themselves in any
commercial treaties which they may make either among
themselves or with other States, by any stipulation which
would prevent the extension to other States of reductions of
Customs duties or Customs facilities accorded by one to another.

* Spanish reserve regarding the whole Article and Notes,
j French reserve regarding Note r.

Appendix IX 421

ARTICLE 10

Where the admission or transit of goods of any description
into any country or the duties leviable thereon are dependent
on the fulfilment of particular technical conditions with
regard, for instance, to their constitution, their purity, their
district of origin, or their sanitary condition, it is desirable
that the Governments should make with each other and put
into operation arrangements providing for the acceptance, in
accordance with rules and principles mutually agreed, of
certificates issued by competent scientific institutions, or
recognized authorities or bodies in the country of origin of
the goods.

D. GENERAL PROVISIONS

ARTICLE n

The questions relating to dumping and differential prices
being among those which concern most closely the equitable
treatment of commerce, it is desirable that the League of
Nations should undertake at an early date an inquiry on the
subject.

ARTICLE 12

The League of Nations, in collaboration with the other
competent organizations, such as the International Institute
of Agriculture, established by international convention, is
invited to facilitate the carrying into effect of Articles 2 and 8
by all the means which are at its disposal, or which are fur-
nished by the States represented at the Conference.

ARTICLE 13

It is desirable that all the Governments concerned should
inform the League of Nations without delay of all modifi-
cations introduced in their Customs tariffs and in their regu-
lations relating to import or export prohibitions or restrictions.

422 The Genoa Conference

CHAPTER II
COMMERCIAL ARBITRATION

ARTICLE 14

It is desirable that the inquiries now being made by the
League of Nations, as to the best means of safeguarding the
validity of voluntary agreements to refer to arbitration
disputes arising out of commercial contracts, should be
continued.

CHAPTER III

TREATMENT OF FOREIGNERS IN THE CONDUCT

OF BUSINESS

ARTICLE 15

Without prejudice to existing Treaties or Agreements, or
to further conventions which it is desirable should be con-
cluded in regard to the treatment of foreigners, it is recognized
that, in order to facilitate economic relations between different
countries, persons, firms or companies, whether commercial,
industrial, financial or insurance, should not be subjected,
in the event of their exercising their industry or trade or
other occupation abroad, to taxes or impositions of any kind
which place them in a less favourable position than nationals.
National treatment should therefore be the rule in fiscal
matters, save in exceptional cases which can only be justified
by the necessities of the public interest, and such exceptions
from national treatment should be applicable to all foreigners,
whether persons, firms or companies, commercial, industrial,
financial or insurance, without distinction of nationality.*

The provisions above indicated should similarly be applied
in the case of persons, firms or companies, commercial, in-
dustrial, financial or insurance, established in a foreign country
in accordance with the laws of the country.

It is further necessary, that the taxes and impositions

* Rumanian reserve regarding the last sentence of the paragraph.

Appendix IX 423

referred to in the two preceding paragraphs should be strictly
limited to that part of the capital effectively engaged within
the country in which they are levied, and to those operations
only which are undertaken in that country.*

It is recognized that double taxation should be avoided by
agreements between nations, the principles of which may
suitably be elucidated by the examination of the matter which
is being undertaken by the League of Nations.

The Italian Delegation draw attention in this connection
to the draft Convention prepared at Rome on the 6th April,
1922, by Italy and the other Succession States of Austria-
Hungary, and it is recognized that this constitutes a first
initiative in the international regulation of this question.
(See Annex.)

ARTICLE 16

It is desirable that, in the matter of passport visa regulations,
all countries should apply as soon and as widely as possible
the recommendations and resolutions of the International
Conference on Passports, Customs Formalities and Through
Tickets, held at Paris in October, 1920, under the auspices of
the Provisional Committee on Communications and Transit
of the League of Nations.

Among these resolutions the most urgent are the following :

(a) The abolition of the visa for exit.

(b) In general all entrance visas to be valid for one year.
The validity of a transit visa to be the same as the period
of the validity of the visa of the countty of destination.

(c) The maximum fees charged for visas to be :

Entrance visa 10 francs gold

Transit visa i franc gold

NOTE. — It is desirable that the Governments concerned

should consider the possibility of a considerable reduction in

the case of emigrants.

(d) The transit visa, unless for exceptional reasons (e.g.
undesirables), to be issued without inquiry solely upon

* Spanish reserve regarding the first three paragraphs of the Article.

424 The Genoa Conference

production of the entrance visa for the country of destina-
tion, in addition to transit visas for the intermediate countries.
It is further desirable that all States should adopt the
recommendations of the Conference above referred to con-
cerning the suppression of the examination of registered
luggage in transit, and of travellers and securities in transit,
and that States with a common frontier should come as far
as possible to arrangements to facilitate Customs examinations
in accordance with the proposals of the Conference.

CHAPTER IV

PROTECTION OF INDUSTRIAL, LITERARY AND
ARTISTIC PROPERTY

ARTICLE 17

It is desirable that all European States which have not
already adhered to the International Convention of Paris of
the 2oth March, 1883, as revised at Washington in 1911,
for the protection of industrial property, and to the Inter-
national Convention of Berne of the gih September, 1886,
revised at Berlin on the I3th November, 1908, and completed
by the additional protocol signed at Berne on the aoth March,
1914, for the protection of literary and artistic work, should
adhere to these Conventions, and should take the necessary
steps for this purpose as soon as possible.

ARTICLE 18

Pending the adhesion referred to in Article 17, every Euro-
pean State in which foreign industrial, literary and artistic
property is not now protected undertakes to give effective
protection to such property on condition of reciprocity. With-
out prejudice to the treaties and agreements which regulate
the question for the present and for the future, each State
shall recognize, restore and protect all rights in such property
belonging to the nationals of other States which would now
be in force in its territory, but for any exceptional legislative
or administrative action taken in consequence of war or

Appendix IX 425

revolution between the ist August, 1914, and the present
date.

NOTE. — In the opinion of some of the experts, it is highly
desirable that any European State which is not already a
party thereto should adhere to the arrangement signed at
Madrid on the i4th April, 1891, for the suppression of false
indications of origin.

CHAPTER V
AGRICULTURE

ARTICLE 19

Agriculture being from the economic and social point of
view an essential factor in the reconstruction of Europe, it is
desirable that the States should encourage in every way the
development of agricultural production.

ARTICLE 20

It is further desirable that the States should give special
attention to the labours of the International Institute of
Agriculture, and that, in development of the practice of the
international agricultural congresses, the agricultural repre-
sentatives both of the Government and of the industry of the
various countries concerned should meet in international
conference to agree upon the measures to be recommended to
their respective Governments.

CHAPTER VI
LABOUR

ARTICLE 21

The economic reconstruction of Europe requires intensified
production, which depends essentially on labour.

The greatest importance should be attached to the assistance
which the workers, men and women of the whole world, and
their associations are willing and able to give, in association
with other elements of production, to the economic restoration
of Europe.

426 The Genoa Conference

In order to obtain the fullest effort on the part of the
workers, and in order to avoid regrettable competition between
nations, the attention of all States is drawn to the importance
of the Conventions and Recommendations adopted by the
International Labour Conferences, it being understood that
each State reserves its right with regard to the ratification of
any one or more of the Conventions.

ARTICLE 22

The present economic crisis, which affects not only pro-
duction but also the consuming capacity of the people, weighs
heavily on the workers, both morally and materially.

While it may be true that measures of economic reconstruc-
tion are alone capable of remedying this crisis, direct measures
to deal with the resulting unemployment appear to be none
the less efficacious for ensuring sustained effort and efficiency
on the part of the workers.

ARTICLE 23

In consequence, and in addition to any arrangements
providing insurance or assistance against unemployment,
the following measures are recommended :

(a) The systematic distribution of all the labour available
by the national organization of employment agencies and
by the international co-ordination, by means of agreements
between the countries concerned, of such agencies (emi-
gration and immigration).

(&) In countries in which conditions permit, the placing
in agriculture of as large a number as possible of such of
the unemployed in industry as are capable of being employed
in agricultural work.

(c) The systematic allocation of public contracts with
reference to the occurrence of unemployment and to the
trades and districts affected, so far as may be consistent with
the general interest.

(d) Development of public works in aid of unemployment
provided that they are useful and productive.

Appendix IX 427

ARTICLE 24

In order to accelerate the effects of the measures set out in
Article 23 :

1. It is recommended that all States which are members
of the International Labour Organization should ratify the
Convention relating to unemployment adopted by the Wash-
ington Conference, and that all the States should take into
consideration the measures against unemployment envisaged
by that Conference.

2. It is suggested that the International Labour Office
should collect and publish periodically all information
available on the experience gained by the different countries
in dealing with unemployment.

3. It is further recommended that all the States should
co-operate in the inquiry relating to unemployment, decided
upon by the International Labour Conference of 1921.

ADDITIONAL ARTICLE RELATING TO EXTRA-
EUROPEAN COUNTRIES

The recommendations presented by the Economic Commis-
sion will be transmitted by the convening States and by all the
invited European States to their respective Governments.

Having regard to the fact that all the principles voted by
the Genoa Conference are an assurance, not only of the restora-
tion of Europe, but also of the equitable treatment of commerce
throughout the world, the Economic Commission, while
recognizing the conditions peculiar to overseas countries, would
highly appreciate it if the delegates of the invited extra-
European States would be good enough to submit for the
consideration of their Governments the principles voted by
the Conference, and desires that all other extra-European
countries should accept the same principles.

428 The Genoa Conference

ANNEX

CONVENTION TO PREVENT DOUBLE TAXATION

(between Italy and the other Austrian Succession States,
April 6th, 1922)

ARTICLE i

Taxation on income derived from immovable property may
be levied only by the State in which such immovable property
is situated, even if it belongs to a national of another con-
tracting State.

ARTICLE 2

Taxes on income derived from the use of capital, and taxes
on annuities, shall be levied by the State in which the recipient
is domiciled, and, in the case of an encumbrance, by the State
in which the immovable property is situated. For the purposes
of this article the principal place of business of the tax-payer
shall be deemed to be his domicile.

In the case of interest on securities issued by the State,
provinces, municipalities, or other corporations duly consti-
tuted in conformity with the internal legislation of the Con-
tracting States, or on securities issued by Joint Stock
Companies, Banks, and other credit institutions, the tax
shall be levied by the State in which the body in question
is situated.

The provision contained in the foregoing paragraph shall
apply also to the taxation of interest on savings bank deposits
or deposits on current accounts in banks and other credit
institutions. If the institution has its headquarters in one of
the Contracting States and branches in one or more of the
other Contracting States, the part of the interest payable
by the branches shall be taxed by the State in which the
latter are situated.

Appendix IX 429

ARTICLE 3

Taxes on earned income, including income derived from the
exercise of a liberal profession, shall be levied by the State
in whose territory the work from which the income is derived
is done.

In the case of salaries, allowances, pensions, wages, and other
remuneration paid by the State, provinces, municipalities,
and other public corporations duly constituted in conformity
with the internal legislation of the Contracting States, the
tax shall be levied by the State in which the body in question
is situated.

ARTICLE 4

Taxes on income derived from an industry or business of
any kind shall be levied by the State in whose territory the
industry or business in question has its headquarters, even
when its operations extend to the territory of another Contract-
ing State.

If the business has its headquarters in one of the Contracting
States, and if it has in another Contracting State a branch,
affiliated company, establishment, or permanent commercial
agency, or representative, each of the Contracting States shall
tax that part of the income which is produced in its own
territory. For this purpose, the financial authorities of the
States concerned may require the tax-payer to produce general
balance sheets, special balance sheets, and any other document
required by legislation.

ARTICLE 5

Taxes on Directors' fees which exist or may be introduced
in the Contracting States shall, in the absence of special agree-
ments, be levied according to the internal legislation of each
State.

ARTICLE 6

Taxation on the whole of the income of the tax-payer shall
be levied by each of the Contracting States according to the
following regulations :

430 The Genoa Conference

1. The same regulations as laid down for such income
by the preceding Articles shall apply to income derived
from :

(a) Immovable property,

(b) Mortgages and liens,

(c) Industry or commerce,

(d) Work.

2. In the case of any other kind oi income, taxation shall
be levied in the State in which the tax-payer has his resi-
dence.

For the purposes of the present provision, residence shall
be deemed to be the place where the tax-payer has an habitual
domicile in circumstances which justify the supposition that
he intends to retain it.

When the tax-payer has two or more residences, the income
above mentioned shall, in the absence of special conventions
to the contrary, be divided proportionately to the length of
his residence in each of the Contracting States.

In the absence of any residence in the sense above denned,
the dwelling-place alone may be made the basis of taxation.

ARTICLE 7

A tax on capital, collected once only, may be levied by
each of the Contracting States on the part of the property
of the tax-payer which is in the territory of that State.

In the case of property consisting of :

(a) Immovable property,

(b) Mortgages and liens,

(c) Industry or commerce,

location in the territory of one of the Contracting States
shall, for the purpose of the application of the tax on capital,
be determined by the principles adopted in the foregoing
Articles regarding the taxation of income derived from such
property.

The treatment of capital (including registered and bearer
securities) other than that covered by (b) of the foregoing
paragraph, shall be governed by special agreements to be

Appendix IX 431

concluded between the Contracting States. In the absence
of such agreements, each of the Contracting States shall apply
its internal legislation.

ARTICLE 8

If the tax-payer has property abroad situate in the territory
of another Contracting State and acquired after the date
determining the application of the tax on capital in that State,
such property shall, in the absence of proof to the contrary,
"be presumed to have been acquired with the proceeds of pro-
perty liable to the tax on capital in the State to which the
tax-payer belongs.

ARTICLE 9

The regulations contained in Article 7 of the present Con-
vention in regard to a tax on capital collected once only, shall
apply also to a tax on capital of a permanent character which
exists or may subsequently be introduced in any of the Con-
tracting States.

ARTICLE 10

If it is proved that the action of the financial authorities
of the different States has resulted in the levying of double
taxation on the tax-payer, the latter may appeal to the State
to which he belongs. If his appeal is allowed, the State
in question may in the interest of the tax-payer demand
through diplomatic channels that the financial authorities
of the States which have levied the taxation in question shall
agree on some equitable arrangement for avoiding double
taxation.

ARTICLE n

The agreements established by the present Convention shall
in no way prejudice the provisions concerning taxation con-
tained in the Treaties of St. Germain and Trianon, nor any
•separate Conventions which have been or may be concluded
between the High Contracting Parties.

432 The Genoa Conference

ARTICLE 12

The High Contracting Parties undertake to render each
other mutual assistance for the purpose of facilitating the
application and collection of direct taxation.

A separate Convention shall be concluded fixing the regula-
tions governing such assistance.

ARTICLE 13

The present Convention shall come into force :

1. In the case of the tax on Capital, on the day on which
the law relating to such tax comes into force in each of the
Contracting States.

2. In the case of the taxes referred to in Articles I to 6,
as from ist January, 1923, as regards taxation for the year
1923 and subsequent years.

ARTICLE 14

The present Convention shall be ratified as soon as possible.

Each State shall forward its ratification to the Italian
Government, which shall notify all the other signatory States.

The ratifications shall be deposited in the archives of the
Italian Government.

The present Convention shall be binding reciprocally on
the Contracting States which have ratified it, and it shall not
be necessary to await ratifications by all the other Contracting
States.

Each of the High Contracting Parties may denounce the
present Convention in respect of one or more of the Contracting
States for the following calendar year, by giving notice eight
months in advance.

INDEX

ADDIS, SIR CHARLES, 71.
Agresti, Mrs., interpreter, 49.
Albergo del Giornalisti, 40.
Allied Experts, Preliminary Re-
port, 82.

Archbishop of Genoa's letter, 31.
Avezzana, Baron Romano, 71.

BANFFY, M., 281.
Barrere, M., 176, 193.
Barthou, M., 49.

Opening address, 57.

Opposes Russian Delegate, 64.

On German Treaty, 105.

Reply to M. Tchitcherin, 131.

Protest, 218, 235.

Closing address, 278.
Benes, Dr., 234.
Bertone, M., 171.
Bianchini, Comm., 77.
Birkenhead, Lord, 38, 39, 75.
Brand, Hon. R. H., 77.
Bratianu, M., 219, 285.
Briand, M., 25, 49, 57.

CATTIER, M., 189.
Camerlingh, M., translator, 49.
Closing speeches :

Banffy, M., 281.

Barthou, M., 278.

Bratianu, M., 285.

Facta, M., 286.

Closing speeches — con.

Hayashi, Baron, 282.

Lloyd George, Mr., 273.

Stamboulisky, M., 281.

Tchitcherin, M., 283.
Colrat, M., 77, 236, 255.
Conditions of meeting, 54.
Conference discuss Russian reply,

216.
Curzon, Lord, 75.

" DE JURE " recognition, 187.
Delacroix, M., 193.
Delegates, names of, 73-77.
Dubois, M., 77.
Durazzo, Marchese Carlo, 73.

ECONOMIC Commission, 74.
Economic Commission Reports,
228.

FACTA, M. :

Welcome to Delegates, 47.

Elected President, 50.

Presidential Address, 51.

Presidential Farewell, 286.
Favoured nation, most, 229.
Final Plenary Session, 233.
Financial Commission Report,

143-

First news of Russo-German
Treaty, 88.

28

434

Index

Formal protest against Rapallo

Treaty, 93.
Formation of Memorandum to

Russia, 193.
Four Commissions formed, 71,

74-

GALVANAUSKAS, M., 261.
Georgian Revolt, 191.
German defence of Rapallo

Treaty, 92.

Giannini, Comm. Amedeo, 73.
Gomes, M., 173.
Grigg, Sir Edward, 38, 40, 194.

HAGUE, proposed meeting at,

221.

Hankey, Sir Maurice, 75.
Havenstein, Dr., 77.
Hayashi, Baron, 265, 282.
Headquarters of Conference, 36.
Home, Sir Robert, 38, 76, 77.

" IMPOSSIBLE " Bolshevists, 216.
Inaugural Ceremony, 45.
Informal discussions, 83.
International Committee of Red

Cross, 272.
Ishii, Viscount, 59, 220.

JASPAR, M., 174.

KARNBEEK, J. K. VAN, 162.
King of Italy's message, 48.
King of Italy's visit, 191.
Krassin, M., 211.

LLOYD GEORGE, MR. :

On Vote of Confidence, April

3rd, 1922, 10.
Draft Resolution, Supreme

Council, u.
Memorandum on Settlement,

1919, 14.

Lloyd George, Mr. — con.

Speech, National Liberal

Council, January 22nd, 17.
On " Pitt precedent," 22.
Proposed " Pact " with

France, 25.
Preference for " Conferences,"

27.

Meets M. Poincare, 30.
Arrival at Conference, 46.
Proposed M. Facta as Presi-
dent, 50.

Opening address, 53.
Conditions of meeting, 54, 68.
Saves the position, 68.
On Rapallo Treaty, 97.
And Rathenau, 97.
" Cloud Disperser," 97.
Address to Anglo-American

journalists, 116-122.
Letter to M. Barthou, 139.
Proposed mixed Commissions

and Truce, 218.
Closing speeches, 234, 264, 273.
House of Commons, May 25th,

294-314.

Lloyd-Greame, Sir P., 73, 75,
83, 177. 193. 229.

MCCLURE, MR. W. K., 38, 194.
Memorandum to Russia, 195.
Mixed Commissions proposed,

218.
Mixed Commissions opposed by

France, 218.
Most favoured nation question,

229.
Motta, M., 193, 256.

NAMES of Delegates, 73-77-
" Note " handed to Russian
Delegation, 221.

435

OPENING addresses :

Barthou, M., 57.

Ishii, Viscount, 59.

Lloyd George, Mr., 53.

Tchitcherin, M., 62.

Theunis, M., 60.

Wirth, Dr., 61.

Organization of Conference, 72.
Origin of, 9.

" PACT " of Peace, 234.
Palazzo di San Giorgio, 45.
Peano, M., 178.
Picard, M., 157.
Platijn, M., 261.
Poincare, M. :

Succeeds M. Briand, 26.

Prefers exchange of " Notes,"
27.

Prevented from attending, 30.

Message to Conference, 48.

Speech at Bar-le-Duc, 112-

115-

Political Commission, 74.

Pope's pronouncement, 31.

Pope's Memorandum on Reli-
gious Freedom, 208.

President's opening address, 51.

President's farewell address, 286.

Press attempt to wreck Con-
ference, 133.

Press Headquarters at Confer-
ence, 36.

Private property question, 193,
214.

Proposed meeting at Hague, 221.

RAKOWSKI, M., 87, 91, 189.
Rapallo, Treaty of, 88.
Rathenau, Dr., 73, 92, 168, 248.
Red Cross, International Com-
mittee of, 272.

Reparations and disarmament,

30.
Report of Finance Commission,

143-
Resolution of Supreme Council,

ii.

Rossi, M., 243.
Rules of procedure, 77-81.
Rumours and discussions, 83.
Russian-German Treaty :

First news of, 88.

Terms of, 88-90.

German defence of, 92.

Formal protest against, 93.

French views of, 96.

Lloyd George addresses the
Press, 97.

Formal German reply, 102.

French reply, 105.

Ten Powers' final reply to

Germans, 108.
Russian reply to Memorandum,

211.

Russian Question, The, 180.
Russians accept Hague pro-
posals, 226.

SANITARY Convention at War-
saw, 270.

Schanzer, M., 76, 83, 159, 216,
219, 257, 265.

Schulthess, M., 164.

Second Plenary Session Report,
146.

Secretary-General of Conference,

71.

Skirmunt, M., 128, 263.
Social aspects of Conference, 41.
Soviet demand, 211.
Stamboulisky, M., 282.
Supreme Council Resolutions,

January, n.

436

Index

TCHITCHERIN, M. :

Arrival at Conference, 42.

Opening speech, 62.

Reply to M. Barthou, 66, 129.

On Poland, 127.

On Commission Reports, 166.

Statement of conditions, 186.

On Economic Commission,

253. 264 •
Closing address, 283.

Ten Powers' final Note to Ger-
mans, 108.

Terms of Russo-German Treaty,

Theunis, M., 60, 77.
Truce proposals, 218.

ULTIMATUM rumours, 193.
Unfavourable impressions, 216.

WARSAW, Sanitary Convention

at, 270.
Wirth, Dr. :

Opening address, 61, 73.

Confers with Lloyd George, 95,

Defends Treaty, 102-105.

Reply to M. Barthou, 106.
Worthington-Evans, Sir L., 77,

148, 211.

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